What is CPM in advertising?

CPM is an important advertising term in the world of a marketer. CPM in advertising allows you to see how much 1000 advertisement views, or impressions, would cost.

An easy way to understand CPM is by putting it in context. For example, if a website’s CPM charge is $5.00, that means that you, as the advertiser, would be paying that $5.00 every 1000 times your ad was seen.

After all, CPM stands for “cost per thousand impressions”!

You can calculate your CPM with our online CPM calculator or the CPM formula.

If you’re not satisfied with your CPM, WebFX can help. We have a team of over 200 specialists that can help you create a digital marketing campaign that is both successful and cost-effective. Our tried-and-true methods have created over 3 million leads, so we must be doing something right!

How do you calculate CPM?

CPM, or cost per thousand, refers to the cost of a marketing campaign that reaches at least 1000 people. The letter “M” in the term refers to the Roman numeral for 1000.

In order to calculate your CPM, there are a few crucial pieces of information that you need.

• First, you will need to determine how many impressions your ad will receive, or how many times your ad will be viewed. You will also need to determine the price of the ad.
• You will then need to divide your total number of impressions, or ad views, by 1000. For example, if your ad is viewed 30,000 times when you divide that number by 1000, the result is 30.
• You will then need to divide the cost of your ad, determined in the first step, by the number you calculated by dividing your ad views by 1000 in the second step, to end up with your CPM value.

In short, the formula for calculating your CPM is ad cost divided by the result of dividing your impressions by 1000.

If you want to skip the CPM formula, you can always use an online CPM calculator to make the calculations for you.

How much does it cost to advertise on different social networks?

With more than 1 billion daily active users, Facebook is one of the most popular social channels. When you market your business on Facebook, you have a good chance to reach at least a portion of your target audience.

It costs absolutely nothing to set up a business account on Facebook. However, if you want to connect with more customers, there are a few paid options for advertising on Facebook.

So how much does it cost to market your business on Facebook?

What’s the difference between CPC, CPM, and CPA?

Similar to CPM, CPC and CPA also exist and serve as other ways of pricing ads.

• CPC: CPC, or cost per click, is very similar to CPM. However, with CPC, you pay for every time someone takes action and clicks on one of your ads. This is extremely useful when you’re promoting an ultra-specific product or service in a niche market.
• CPA: CPA, or cost per acquisition, is when the promoter of the ad only has to pay when a purchase is made that can be tracked back to the buyer clicking on the ad that resulted in that purchase. If you’re going to utilize CPC or CPA, it’s important to have a high click-through rate since the goal of the ads is to ultimately have someone purchase the product that you’re advertising.
• CPM: With CPM on the other hand, you only pay per 1000 impressions. Impressions essentially refer to how many people see your ad. They don’t have to take action (like clicking the ad) to be considered an impression. Click-through rate is less important with CPM since you’re not as worried about driving conversions as you are increasing brand awareness. This makes CPM rates extremely low and cost-effective.

Should I use CPM, CPA, or CPC?

As with every aspect of marketing, different techniques will be successful depending on the campaign type.

CPM often makes the most sense if your company is driven toward increasing awareness for your brand. It is also extremely helpful when your campaign is aiming to convey a detail-oriented message to your customers. It’s less focused on clicks and can be low in cost, making it great for low budgets.

On the other hand, CPC and CPA stand out as a fantastic choices if you are using digital advertising. If you’re focused on doing more than just making an impression on users and your end goal is a purchase, one of these options is the way to go.

When should you use CPC instead of CPM?

If the CPM of your ad campaign is too high to be worth the investment, or if you just aren’t seeing results, a CPC PPC campaign might be a better option.

With pay-per-click advertising or PPC, you only pay for ads when people actually click on them. That way, if someone sees your ad and isn’t interested, you haven’t lost anything. If you use search engines, you’ve most likely seen PPC ads before.