What is CPM

what is cpm

If you have an eCommerce or are thinking of setting up one, the most likely thing is that you have heard a lot about SEO, SEM, positioning ... But, what about CPM? Do you know what CPM is?

The acronym for «Cost per mille", in Spanish "Cost per thousand»Impressions is one of the most difficult to understand, but it is one of the most widespread payment models for advertising on the Internet and knowing what they are talking about is very important. Therefore, here we try to help you understand it.

What is CPM

As we have explained before, CPM, or Cost per thousand, means that it is an advertising model by which a person, company, brand, etc. pays every time the ad is displayed.

For example, imagine that you have a cost per thousand impressions of 20 euros. It means that you would have to pay 20 euros for every thousand views. When I have them, you pay. If it doesn't arrive, you don't pay.

Now, the visualization thing is very good. For an eCommerce it would be a way to make yourself known, but is it profitable? Imagine the following. You are on Facebook and you see an ad for a store. And from another. And another ... Do you usually give all those ads? The safest thing is that no, that is, no matter how much "publicity" the CPM generates, in terms of views or impressions, the truth is that if it does not finish "hooking" the public, it will not affect the business .



We have not gone crazy, far from it. But it is that in addition to the CPM there are many other terms that you have to know since all of them are related to each other. Specific:

  • TPC: Cost per thousand. Actually, it is the same as CPM, only it can be called this way.
  • CPA: Cost per action.
  • CPC: Cost per click.

Each of them has a different performance, and is paid differently. If CPM is equivalent to costing you x money per thousand impressions, in the case of CPC the cost will be for each click they give, or CPA for each action they take.

Of all of them, perhaps the CPM and the CPC are the most related, although if you realize they are two different things.

What is CPM for

Having said all the above, it is possible that right now you are thinking that it is useless, and that it is better to invest in something else. but it is certainly not like that. The goal of CPM is to get a great view of that ad. That is, get publicity, that people see you, know you and, hopefully, that they give the ad to visit your page.

It is profitable? Yes and no. We explain it to you. CPM is profitable because it helps you increase your presence on the Internet. For a new store, for a brand or a new product, it may be the perfect action because you will be reaching a mass audience. Now, it is not profitable because it does not assure you x number of visits to your website. Here you go to luck a little; that they like the ad or what they see (mainly the price or the novelty) and that they click on your eCommerce.

In the case of more established, large or well-known stores, this is not as effective. Everyone already knows it, so why use it?

How to calculate CPM

How to calculate CPM

As with many other terms, the CPM also has a formula with which to calculate it. Do you want to know what it is? Basically we are talking about dividing what it would cost to place the advertisement by the number of impressions of that ad, always in figures of thousands.

In other words, the formula would be:

CPM = Total cost / (views / 1000)

How much

Normally, the Average CPM is usually between 5 and 50 euros. Why is the hairpin so big? Well, because it depends on the section where you want to put the ad, on the segmentation, on the competition that there is for that site, etc. All this makes the average price go up or down.

In any case, you should bear in mind that this model is the one most used for recognition campaigns, branding, etc. but not conversion, because you cannot be sure that there will be clicks (although this often depends on the type of ad and how good you are at capturing people with it).

Tips for investing in this model

Tips for investing in cpm

Before embarking on the adventure and investing for your business in CPM there are some tips that we want to leave you and that you should read. Sometimes, the CPM, as we have seen, is not the most appropriate based on the objective we want to achieve, and that is why it is important to keep in mind that:

  • CPM is really the right advertising model. If you do not know if it is the right one, it would be advisable to inquire with a marketing consultant or a digital strategy advisor who could analyze your business, know where it is, see the deficiencies and bet on improving using the most effective and appropriate resources.
  • Know where the advertising is going to be. Imagine that you want to pay a CPM on a page and it turns out that the advertising is at the end of everything where it is not seen. Obviously getting impressions can be achieved, yes, but it will not be visible, and if the reader does not see that message, that ad, it is as if it does not exist.
  • You have to choose well the page where you will put a CPM campaignFor example, that it is well positioned, that it does not have problems with Google, or that it is poorly positioned, that it is "banned", or that it is negative for your website.
  • If you finally opt for this model, you have to build an ad that is simple, eye-catching, easy to remember and that impacts. It is not as easy as you think, but you have to try to balance the image with the text and make it something that, when you see it, you cannot get away from it.

Now you know a little more about the CPM, it is only a base. If you want to bet on this type of advertising and campaign, our best advice is to continue researching this term and to get advice to magnify your investment in the results you expect.

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