Cost Per Mille (CPM) In Digital Marketing Space

It’s no secret that the digital advertising industry continues to grow and burgeon, with 2.14 billion people now using the Internet. By using digital advertising, publishers and advertisers can comprehend the effects of their marketing campaigns and maximize the return on their advertising budgets while elevating their brand awareness at the same time.

A cost per mille or cost per thousand is the amount an advertiser pays per thousand impressions of their ad displayed on a website. Since their inception, online marketers have traditionally used CPM to determine advertising costs and the price of web ads. To calculate CPM, we need to divide the total ad spend by the number of impressions, which should be multiplied by 1000.

Ad Spend/Impressions *1000

Advertisers benefit from industry-standard CPMs since they can track ad impressions despite the availability of a multitude of data and metrics to measure total impressions, digital views, user engagement, and ad effectiveness. There is no better option for advertisers looking to increase their brand awareness and visibility than the CPM digital marketing campaign. A crucial factor for advertisers to pay attention to is the number of times their ad inventory is viewed on a specific website and how many times it is successfully displayed. New entrants to the market can benefit from running a CPM campaign across various websites, desktops, and mobile devices as it increases click-through rates (CTRs) and builds brand awareness.

What is Good CPM?

Now we will discuss briefly about good CPM. Advertisers can apply CPM pricing to their advertising campaigns by evaluating their previous campaigns, comparing them to industry standards, and assessing the impact of CPM on their return on investment (ROI). A lower CPM is not a good indicator for advertisers as it exhibits poor quality traffic. A high CPM doesn’t necessarily translate to higher earnings for publishers since some ad inventory may not get sold, even with a high CPM.

Steps for optimizing the CPM Campaign

As advertisers and publishers get used to CPM and its advantages, they can optimize CPM campaigns more effectively.  Here are the best tips for optimizing CPM campaigns

• Choosing an ad network – CPM strategies can be leveraged successfully through ad networks such as Google AdSense, Criteo, and SmartyAds. Knowing where to begin, or even when running advertisements on a CPM basis is the best option, can be overwhelming for small businesses that are new to display advertising. To evaluate ad inventory’s success per thousand impressions and optimize revenue streams, understanding what affects CPM rates and the seasonality of these variations is crucial for the publishers. Publishers must evaluate different factors to determine a reasonable CPM for their ad inventories.
• Get ready for seasonal variations – It is indispensable for publishers to check the seasonal variation in CPM rates which helps to benchmark the performance with the standards set and forecast the future. Past data must be verified, and publishers should keep an eye out for dips in CPM. For example, if a publisher owns a website for dating, then February will be a big month as the advertisers will flock around and increase their spending on Valentine’s Day. On similar lines, January may be a goldmine for publishers with finance websites or health fitness blogs, as customers will rush there to kickstart their new year fitness and wealth resolutions. Publishers must anticipate these swings, which helps them to be well prepared when a drop comes, allowing them to plan cash flows accordingly. The best way for publishers is not to make sudden changes during a downswing, and they can use the time to work for upcoming content to benefit when advertisers are buying big.
• Placing ad inventory on a Supply Side Platform – For high CPM, publishers can place their ad inventory on SSPs, which makes their ad inventory available to several advertisers. If publishers have a niche audience and robust website at their disposal, the chances of high competition for their ads will arise effortlessly. The next best alternative is to test and experiment with ad formats and ad placements to enhance ad viewability. The next best option is to focus on the fill rate, which is one of the easiest ways to show whether or not the ad request on the server has been successful. By increasing the fill rate of the ad placements, publishers can boost their earnings even with reduced cost per thousand figures.

CPM a final thought

CPM strategies require continuous testing and analysis to determine what is working. CPM campaigns must be successfully carried out to drive high traffic and maximize impressions.