More About CPM:
CPM, or Cost per mile, is a standard metric used in the advertising industry to analyze the cost-effectiveness and efficiency of an advertising campaign. The metric is based on the number of impressions your advertisement gets, with “mille” meaning every thousand impressions.
An impression gets counted every time users scroll past your ad on the advertising network. That’s why CPM gets used by marketers for brand awareness campaigns where visibility is the primary goal. Other advertising metrics, like CPC(cost per click), work differently from CPM.
CPM V/S CPC
CPC (cost per click) is the amount paid by advertisers for each click on their ads displayed on websites or social media, but CPM (cost per mille) is solely based on the impressions, regardless of whether it got clicked or not. In CPM, unlike CPC, you need to pay the amount at every 1000 impressions.
Why Use the CPM Model?
CPM is considered more budget friendly than CPC and other pricing models. There are several reasons to use CPM:
- Brand Awareness: CPM model is very effective when the goal is to increase brand awareness rather than driving immediate actions. Here you pay for getting impressions and reach as many people to grow brand familiarity.
- Predictable Spending: Since the CPM model charges per thousand impressions, it is easy to estimate and control the advertising cost. Comparatively, It is often harder to pin-point cost in performance-based models.
- Ease of Use: The simplicity of the CPM model makes it accessible for both novice and experienced advertisers. Advertisers can benchmark their performance and scale the campaigns across channels easily.
How to Increase Your CPM Performance?
To create a successful advertising campaign, follow these steps:
- Always aim to reach a broader audience. The more views your ads get, the less each impression costs.
- While aiming broader, make sure you still target the relevant audience. Your campaign will not yield good engagement if you don’t target the right audience. Sometimes, a more targeted message can drive better overall campaign performance, even if the CPM is slightly higher.
- Choose your advertising platforms wisely. Platforms like Facebook, Instagram, and YouTube are ideal for CPM campaigns due to their large user bases.
- Use CPM bidding to pay for impressions, always set up your campaign for CPM bidding, indicating you’re paying for impressions.
- A/B test with different ads and keep monitoring your campaigns to adjust your bid if you’re not getting the desired impressions at a reasonable CPM.
- Limit the number of times your ad is shown to the same user by capping the frequency. It ensures that your budget is spent on reaching new audiences instead of boring the same audience.
By following these steps, you can create a well-targeted and cost-effective advertising campaign that delivers the results you need using CPM.
