CPM in Advertising: How to Calculate and Compare the Cost of Advertising Camp...

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Cost per millennium or CPM is a model for paying for an advertising campaign, in which the advertiser pays a fixed amount for every 1,000 impressions of a banner, ad or creative of any other format. Unlike CPC, where payment is made per click on an ad, CPM provides a much larger number of coverages for a smaller budget. In this article, we will discuss when it is more rational to use such a model, how to calculate the budget for a campaign using this metric and what CPM indicator is considered good.

Who is the Cost Per Mille model suitable for?
In marketing, CPM is the most commonly used payment method on page seo service when launching targeted advertising, when creatives are shown to a very wide audience. It is also rational to use payment per thousand impressions in contextual advertising aimed at increasing coverage. This model is effective in several cases:




For startups and when launching a new product
Paying per 1000 impressions allows you to evaluate the effectiveness of advertising without large initial investments.

For organizations with limited marketing budgets
CPM allows you to clearly control your expenses: you know for sure that your ads are not being “clicked on”, and you will only pay for views of your creative by your target audience.

To increase brand awareness
The customer journey begins long before they get to know your product. Before they want to buy something from you or use a certain service, they need to know about you and start trusting you. Experts believe that CPM in advertising is an ideal option for those who need mass recognition: the model can provide large coverage even with a small budget.

You shouldn't think that CPM is the best model for absolutely any business niche. For example, it is absolutely not suitable for companies selling premium products. Such business categories are better off using conversion models with payment for the target action: this will help reduce the overall cost of campaigns and minimize marketing expenses in general.

Cost Per Mille does not work very well in cases where it is necessary to quickly attract customers and make deals. In addition to coverage, you will need to carefully consider the sales funnel, which is aimed at increasing the temperature of the lead. In such cases, models with a fixed price per click, which attract already interested customers, are better suited.

How to calculate CPM?
The CPM metric must be calculated even when using other promotion models: the data will allow you to predict the budget and reach of the advertising campaign, as well as select sites with the most suitable audience. There are several calculation methods, each of which corresponds to a specific business task.

Basic formula
CPM is calculated by multiplying the number obtained by dividing the total cost of the campaign by the number of impressions by a thousand. For example, if your advertising budget is 1,000 rubles, and the site stops showing the ad after 1,000 impressions, then the CPM indicator will be 1 ruble.

Calculating the number of effective impressions
The goal of any promotion is not only to make a product or brand known, but also to get real customers. Therefore, the metric is often calculated taking into account conversions and ROI – return on investment in advertising. This allows you to accurately calculate how much each lead costs you and understand how profitable it is to use a particular promotion channel.