CPM Advertising Definition
CPM stands for Cost Per Mille or cost per 1000. CPM is a payment model for online advertising where the advertiser pays per thousand times an advertisement has been shown. An impression of an advertisement is also called a view or an impression. With CPM you only focus on impressions and not on clicks.
CPM only applies to the Google Display Network and not to the Google Search Network .
When to choose CPM?
CPM advertising is often used as a billing model when raising brand awareness is the objective of the campaign. The campaign goal is to show the ad to as many people as possible with a certain frequency. Advertising per thousand impressions also means paying per thousand impressions, regardless of the number of clicks.
CPM is useful if it is not your main goal to attract visitors to your website. This is the case, for example, with the announcement of a free event. Do you want as many registrations as possible for a (paid) event? Then you'd better choose CPC bidding.
CPM IN THE ONLINE ADVERTISING MARKET
On the internet, the reach of an advertisement can be calculated more clearly than in the physical world. That is why CPM advertising models are popular with online publishers.
When, for example, the CPM is € 25, then an advertiser knows that he has to pay € 25 for 1,000 impressions of his or her advertisement.
This gives clarity, although many advertisers also have problems with that theoretical clarity.
But the flip side is that your ad can be shown at times when there are fewer qualitative visitors.
The Difference Between CPC and CPM
CPM is one of the most popular tools for determining the cost of an advertising campaign. It is great for almost any type of advertising (on the radio, on the Internet, newspapers or on television), and since all other parts of the equation remain unchanged - you can fairly assess the effectiveness and cost of one or another advertising channel.
With the arrival of Pay Per Click programs such as Google AdWords, the CPM model has gone to the background, although we have to note that many blogs and advertising platforms use CPM models.
The familiar Google AdWords still offers you the choice between CPM and CPC (Cost Per Click).
Advertisers generally love a transparent and result-oriented advertising system where paying for a click is the most insightful.
Yet CPM can sometimes be cheaper. After all, the publisher is concerned mainly with counting the available space he has for advertisements and is less interested in your return.
Suppose you have a tested advertisement that generates a lot of clicks, then it might be smart to pay it on CPM. Your total advertising costs will then be lower.
The profit from CPM advertising depends on the total number of impressions made on the site. That is, it is a model of relationship with the advertiser, which provides a fixed payment for a thousand impressions of the advertisement.
Advertising with CPM is one of two main types of interaction of the advertiser with the advertising platform. It works the same way as CPC, the difference is just how exactly it
monetizes.
In CPC, the profits are brought in by clicks, and in CPM by the number of impressions of advertising or page views. CPC is a good way to earn on advertising with a small audience, while CPM does not work so well with low traffic - because page views will be smaller, which means less impressions and less money.
So CPM requires a broad audience. In such a case this method becomes relevant for the monetization of the site.
CPM advertising makes sense for campaigns aimed at increasing brand awareness or broadcasting a particular message. And also good for video.