CPM (cost per mille) is an online marketing advertising billing model in which advertisers pay for each time an ad is displayed a thousand times. CPM is one of the oldest billing models on the internet and is still a popular way to plan and execute advertising campaigns. In this article, we will outline in more detail what CPM is and what its advantages and disadvantages are.
What is CPM?
CPM is the cost of advertising expressed in dollars per thousand impressions. Advertisers pay per display of their ads on websites or advertising platforms. CPM is often used for advertising campaigns that focus on increasing brand or product awareness rather than direct sales.
The CPM is calculated as the cost per ad display (CPV) multiplied by the number of impressions (multiplied by one thousand). For example, if an advertiser wants to display their ad 1,000 times and the CPV is USD 0.05, the CPM is USD 50.
Advantages of CPM
- Increased brand awareness – CPM is an effective way to increase brand and product awareness. Ads are displayed thousands of times, allowing you to reach a large number of people.
- Budget stability – CPM enables the planning of a stable advertising budget, as the advertiser only pays for ad impressions, not clicks or conversions.
- Precise targeting – advertisers can choose where their adverts will be displayed, as well as precisely define the audience they want to reach.
Disadvantages of CPM
- Low conversion rate – because CPM focuses on increasing brand awareness rather than direct sales, conversion rates can be low.
- No guarantee of clicks – advertisers pay for ad impressions but have no guarantee that recipients will click on the ad.
- Risk of fraud – with CPM there is a risk of fraud because there is no assurance that the ads are actually displayed in front of real audiences.
CPM is a popular advertising billing model that enables advertisers to increase brand awareness and reach a large audience. CPM also allows for stable advertising budget planning and precise targeting of ads. However, CPM also has disadvantages, such as low conversion rates, no guarantee on clicks and the risk of fraud. When choosing an advertising billing model, advertisers should consider their advertising goals and tailor the model to their needs.
It is also important for advertisers to monitor the performance of their advertising campaigns and adjust their strategies based on the results. This will enable them to achieve the best results and get the greatest return on investment.