What are CPM Ads?

April 17, 2020

what is CPM

CPM stands for Click Per Miles. It is also known as Cost per thousand. The “M” in CPM represents the word “mille,” which is Latin for “thousands”. These are the terms that denote the price of 1,000 advertisement impressions on one webpage. If any publisher charges $2.00 CPM for his website. Then an advertiser must pay $2.00 for every 1,000 impressions of its ad.

What’s Cost Per thousand means?

CPM is the most used method used for pricing web ads. Cost Per Thousand is the expanded term of CPM which is also known as cost per mille. Advertisers frequently measure the success of a CPM campaign by its click-through rate. That is the percentage of people who saw your ad upon the number of people who clicked on it. Let’s understand whit an example, an advertisement that receives 4 clicks for every 100 impressions has a 4% CTR. We cannot measure an advertisement’s success by CTR alone because an ad that a reader views but does not click may still cause an impact.

what is Cpm
What is CPM by Naman Agarwal

Page Views vs. Impression

It is possible for the number of ad impressions to differ from the number of visitors to the website displaying the ad. Let’s take an example for better understanding, an ad might receive placement in two locations on a website, suppose as a horizontal banner across the top of the page and a vertical side banner alongside the page’s text. In this case, the advertiser has to pay for two impressions per page view. So here the impression count will be 2 and the page count will be 1 only. So, this is how both are different.

CPM vs. CPC and CPA

CPM represents one of several methods used to price website ads. Other pricing models include cost per click, where the advertiser pays each time a website visitor clicks on the ad, and cost per acquisition, where the advertiser only pays each time a website visitor makes a purchase after clicking an ad.

Different pricing methods are more appropriate for some ad campaigns than others. CPM makes the most sense for a campaign focused on heightening brand awareness or delivering a specific message. In this case, the CTR matters less, since the exposure from having an ad prominently placed on a high-traffic website helps promote a company’s brand name or message, even if visitors do not click on the ad.

Website publishers like CPM advertising because they get paid for just displaying ads. However, because CPM rates are low. The $2.00 rate mentioned above is fairly standard—a website needs to boost traffic to make decent money from CPM ads.

Companies focused less on mass appeal and more on promoting a product to a niche audience gravitate toward CPC or CPA advertising since they only have to pay when visitors click through to their site or purchase the advertised product.

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