On the other hand, CPM is a price and reach metric employed to estimate the cost of a campaign and its reach within an advertiser’s budget. In other words, for every 1,000 impressions, the publisher or app developer will generate $1.75 in revenue. Therefore, the publisher or app developer’s eCPM is calculated in the following way: Let’s say a mobile app’s ad earned $175/day and served 100,000 ad impressions. eCPMįirst and foremost, eCPM is a metric used by publishers. Now that we know the what, how, and when to use the CPM pricing model for digital marketing, let’s see how it compares to other pricing models in the programmatic ecosystem. How do you calculate CPM?Ĭalculating cost per thousand is an important metric and is represented formulaically as:Ĭompare your numbers How does CPM compare to other advertising metrics? ![]() In this scenario, where you are in a niche market with a niche product, CPM is the way to go in order to start building recognition of your name and brand. Serving your ads on the Whole Foods site or other local organic market sites gets eyeballs on your brand and a “coolness by association” factor, which can help you build your brand recognition. Let’s say you have just perfected the ideal vegan, gluten-free granola, and are ready to get your name out there. Advertisers working on brand awareness or focused messaging use a cost per mille model because it captures exposures over “clicks.” Why is CPM important?ĬPM is only one of numerous digital advertising pricing models, which are appropriate for different types of ad campaigns. In the real world, this works best for larger publishers because advertisers pay a set price based on the number of impressions an ad placement receives - either monthly or quarterly. Cost per thousand is the pricing model used for certain programmatic ads in the programmatic ecosystem. In the programmatic advertising ecosystem, you can automatically buy and sell digital ad inventory. The “M” in CPM stands for “mille,” which is Latin for a thousand. CPM / cost per thousand is a marketing phrase used to indicate the cost of one thousand ad impressions on a web page.
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