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CPM is an online ad pricing model. CPM stands for Cost per Mille and it’s also known by CPT, Cost per Thousand.
Besides CPM, there are other common digital advertising models:
- CPA: Cost per action
- CPC: Cost per click
If CPM is chosen as a payment option, the advertiser will pay each time the ad is displayed, no matter whether it was clicked or not.
CPM pricing model, cost per thousand impressions, means that the advertiser pays each time an ad is displayed.
For example, if CPM is $20, the advertiser will pay $20 per one thousand times the ad is viewed, that is, every time the ad receives one thousand impressions.
What CPM is for
CPM values how many times online ads are viewed.
This model is mainly used when the objective is to get a massive reach, for example in branding campaigns. This online payment option for your ads is profitable for those brands that are looking for reinforcing their presence in the digital world and putting themselves on the map.
How to calculate CPM
Let’s see an example:
- The total cost of an ad campaign is $20,000.
- The total audience is 2 million people.
CPM is the most popular model for branding awareness campaigns.
However, CPM bidding is not advisable to use when the strategy is focused on increasing conversions.
On web portals, the average CPM varies between $5-50. However, it depends on how it is segmented, etc.
Now that you know the meaning of CPM or cost per thousand impressions, tell us what your thoughts are about this online advertising model and if you have already tried it.