The abbreviation CPM stands for Cost per Mille and describes the costs per 1,000 impressions. The key figure is used primarily in marketing and is applied both online and analog. With the help of CPM, marketing campaigns can be specifically analyzed and controlled.
This is how it can be calculated:
|CPM = (Cost / Impressions) x 1,000|
You create an advertising campaign with a total budget of 4,000 € per month. After one month, you have received a total of 3,000,000 impressions. Now you can calculate the CPM of the ads:
|(4.000€ / 3.000.000) x 1.000 = 1,33€ per 1.000 impressions|
So for the price of 1.33 € you have received 1,000 impressions. This formula is helpful if the created campaign is focused on clicks. This way, you can check whether the campaign not only achieved good click prices, but also achieved a high reach at a reasonable price.
In Germany, the abbreviation TKP is often used as a synonym for CPM and means “thousand contact price” or also “thousand contact price”. In English, “thousand ad impressions” is also used as a description for CPM. Regardless of which term is ultimately used, the details remain the same: It is always about the cost per 1,000 impressions.
In theory, the CPM can be found wherever advertising is placed. This can be the case in the digital world as well as in the analog world. For example, the costs of TV commercials and radio advertising are also defined by the CPM. However, many will be familiar with the key figure from online marketing. Here, CPM plays a role not only for advertising in search engines, but also for users of AdSense or for sellers on Amazon. Social media also use cost-per-mille to calculate the cost of ads.
It does not matter whether the ads are played on mobile devices or via desktop. However, the cost-per-mille can vary slightly on different devices. After all, the competition for smartphones may also be different than on desktops. Also, it’s important to know that CPM is not the ideal solution for a specific platform. Depending on the type of campaign and the goals being pursued, the appropriate billing method will also vary.
With the help of the CPM, campaigns in Google Ads can be analyzed or controlled. For advertisers, it can be interesting to calculate the CPM to give their own campaign an additional measurement value. This is because it can be used to draw conclusions about brand building, for example. This makes it possible to steer marketing in a certain direction.
However, CPM can also be selected as a bidding strategy. If the campaign is primarily intended to provide visibility and clicks are not the primary goal, a campaign with a cost-per-mille focus can make perfect sense. This is because the ads tend to reach more users and are seen more often.
But CPM is not only an important abbreviation for Google Ads. They are also relevant for AdSense. Thus, blog or website operators know how much money you earn per 1,000 impressions and how interesting you are to Google or advertisers. Because a high CPM value means many interested parties bidding for a place on the website.
For some time now, Amazon has also been an interesting website for advertisers. Here, too, it is possible to create ads for targeted marketing. Similar to Google, Amazon uses the possibility to display ads based on CPC (cost-per-click) or CPM.
Since Amazon primarily wants to sell products and is mainly used by users with a high purchase intention, the CPM is also an extremely important key figure for Amazon. After all, the more customers interested in buying see the company’s own product, the better. In contrast to Google, Amazon users are often not looking for information, but want to purchase a specific product. Accordingly, a focus on CPM is potentially advantageous here.
Of course, the CPM is also used in social media. For example, CPM on LinkedIn or Facebook, similar to Google, determines the bidding strategy. If many users are to be reached, then CPM is the best bidding strategy. Especially on social networks, CPM is an important factor to perfectly optimize and adjust one’s own campaign. This is because the extensive target group settings can be used to define exactly which users are best suited to the ad. Then, these users only need to be shown the ad frequently enough until they buy. If the target group is very well set, targeting on CPM can very likely even be cheaper than CPC, as users will then click on the ads due to the high interest. With CPM, the cost will not increase if there are many clicks, while with CPC, the budget will be used up quickly if there are many clicks.
It is particularly interesting for new products. If hardly anyone knows the new product so far and therefore no one is looking for it, an advertising campaign geared to CPM can arouse initial interest and achieve a high reach. However, this does not only apply to products, but also to unknown companies. These can also benefit from a good campaign to increase company awareness.
Furthermore, it is the perfect method to create retargeting campaigns. With customized content, these ads can ensure that users ultimately convert with you. This is because people often abandon the purchase process or leave the page. Here, a short reminder using retargeting can help to bring back the lost users and convince them. Often it is only a small reminder after a few days to finally convert visitors to a customer.
Ultimately, experience decides which method is the better one. Only after trying out different options can you say for sure which is the best.
CPM is an English abbreviation and stands for Cost per Mille. Translated, CPM means something like “cost per 1,000 impressions”. In marketing in particular, this is an important key figure for campaigns and is used both online and analog.
Not within one campaign. However, two different campaigns can be created. The CPC campaign is used to generate traffic, while the CPM campaign is used for retargeting or brand awareness.
An impression is counted each time a user sees the ad. This means that the same user can generate more than one impression. Impressions therefore never reflect the exact number of users who have seen an ad, but only how often this ad was played out.
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