For businesses and advertisers, understanding the meaning of CPM (Cost Per Thousand Impressions) is essential in order to effectively utilize online marketing. CPM is an online ad pricing model that stands for “cost per thousand impressions”. Here is what you need to know about this useful advertising tool.
CPM is the acronym for “cost per thousand impressions”, which is a pricing model for online advertising. As suggested by the name, this method of payment is based upon the number of impressions the advertisement receives; with “thousand” referring to a thousand impressions. This means that the advertiser will pay a certain rate for every thousand times the ad is shown or viewed.
To understand how CPM works, it is important to first understand what an “impression” is. An impression occurs each time an ad is viewed by a unique visitor, accounting for each and every time someone views the ad during a given period of time. So, an ad that is viewed twice by the same person, is still only counted as one impression.
When utilizing CPM, advertisers typically establish a maximum amount they are willing to pay for every 1,000 impressions. For example, an advertiser who has a budget of $15 for every 1,000 ad impressions will pay the selected platform $15 for every thousand ads.
Though CPM can be an effective way to manage advertising budgets and an accurate measure of performance, it is important to understand it’s advantages and disadvantages, in order to make an informed decision on whether it is appropriate for you. Here are a few pros and cons of CPM:
CPM can be an effective way to measure the success of an advertising campaign, as well as an affordable option for businesses aiming to stay on budget. However, it is important to note that it is best suited for brand awareness campaigns, as opposed to performance-based campaigns as it does not provide incentive for viewers to click or interact with the ad.
Understanding CPM is essential for businesses looking to make the most out of online marketing. CPM stands for “cost per thousand impressions”, where advertisers pay a certain rate for every thousand times the ad is shown or viewed. CPM can be an effective way to manage advertising budgets and an accurate measure of performance, but it is important to understand it’s advantages and disadvantages in order to make an informed decision on whether it is appropriate for you.