CPM is a common metric used in digital advertising and marketing. CPM can be used to compare the effectiveness of different channels, such as Facebook and Google Ads, or even to compare different media types within a single channel, like video versus display advertising.
In this blog post, you’ll explore what CPM is in-depth:
- What it means.
- How you might use it in your business.
- How you can get started tracking CPM across your own campaigns.
What does CPM mean?
CPM is short for cost per mille, which means that you pay a certain amount to display your ad 1,000 times.
In digital marketing terms, an impression is any time an ad has been served to a user. For example, if the same user looks at two banner ads within one web page, they have seen two impressions, but if they see each of those banners on separate pages, then they’ve received four impressions.
Each time an impression occurs (for example: when someone views your banner), it costs you a certain amount of money because people only sometimes click on every advertisement that comes their way.
Benefits of CPM
CPM is a good indicator of an ad campaign’s value and effectiveness in generating leads or sales. A high CPM means that your ads are getting viewed at high rates by your target audience because they are being shown in places where they are likely to be relevant.
CPM can also give you insights into how well content is performing on various platforms. Suppose one platform has a lower CPM than another one. In that case, it may mean that people are more interested in reading articles related to your business topic on this site versus other ones—or perhaps there’s some other factor involved (such as higher traffic volume).
Experts like AdRoll say, “CPM is used in campaigns that are made to be seen by thousands and thousands of population.”
How can you increase an ad campaign’s CPM?
The number of people who see the ad is important because, obviously, if no one sees it then you aren’t likely to get many clicks.
However, optimizing your ads continues beyond increasing the number of impressions they receive. Your aim should be to increase not only how many times someone sees an ad but also how much time they spend on the site after seeing it. This can lead to a higher CPM since people are more likely to convert after seeing and interacting with an advertisement multiple times (and over a longer period of time).
It’s even better if that person has interacted with your website before because this means they’re more familiar with what you do, which makes them far more likely to convert into customers or leads than someone who hasn’t used any of your products or services yet. For example: If you are looking for running shoes online, you might try out several different brands until you find something that fits your needs best—this is why retargeting works so well!
In the end, it’s used in various ways, from calculating ad budgets to comparing costs for different channels. Knowing your CPM helps you decide where best to spend your advertising dollars and what kind of return on investment (ROI) you can expect for each campaign type. By keeping track of these figures over time, you can improve your overall performance by choosing the right mix of channels with high-value customers who buy often enough that they make up for the cost per impression (CPM).