CPM, you’ve probably heard this acronym before, but what does it mean? CPM stands for Cost Per Mille or cost per thousand impressions. An impression is when an advertisement is “seen” on a digital page. Impressions are common on display advertising and display ads are typical sold by impressions and the cost is broken down to cost per thousand. It is the amount paid for every thousand impressions an ad generates. It is an essential metric because it measures the cost-effectiveness of various advertising channels.
CPM vs CPC
Marketers are torn when debating the two options. CPC (cost per click) is more common in search but can also be an option in display. The reason it makes more sense to have a display campaign as cost per thousand is the ad itself being a creative and visually appealing ad can have power without any click. Branding or name recognition occurs along with public awareness, this of course has great value.
What is CPM best for?
CPM is a great way to increase brand awareness. Why? The exposure of an ad placed on a site with high-traffic will help promote a brand where someone actually clicks on the ad or not. People are less likely to click on an ad from a brand they’ve never heard of so this will help elevate awareness for a campaign focused on conversions.
CPM is also a great way to narrow down your demographic. It can help you understand interest. For example, if you were targeting a wide age range but realize it is best for an older demographic then you can adjust your ads accordingly.
However you decide to use CPMs, you will be able to gain valuable insights to develop your marketing strategy.
How do you calculate CPM?
The best and easiest way to calculate CPM is to use the Thumbvista CPM calculator. Our calculator can do the heavy lifting of manual calculations for you. However, for an understanding of how to manually calculate it you can take the total cost of the advertising by dividing it by the number of impressions and multiplying it by 1000.
To use the Thumbvista calculator, click here.
What does the calculation mean?
Calculating the CPM will help you understand which channels are a better investment. For example if a search engine has a lower CPM than a social media channel, then you would want to use the search engine because it will cost less to reach 1,000 views.
You can take any guess work or manually calculations by using Thumbvista for your advertising needs. Contact us today to get started.