CPM in advertising stands for cost per mille (mille is a Latin
term used for thousand) or cost per thousand. CPM is a measuring unit in
advertisement and highlights the cost an advertiser pays for one thousand
views. To understand the term CPM one must have a general idea about
advertising.
What is advertising?
Advertising is an activity that focuses on producing
advertisements for different kinds of products and services.
Advantages of CPM in Advertising:
As highlighted above, CPM is a measuring unit that highlights
the cost an advertiser of a commercial product pays for one thousand views. In
online advertisements, an advertiser has to pay a significant amount per
thousand views of his product. One significant example of such an advertisement
is the Google ads. There are many reasons why CPM is better than any other mode
of highlighting the cost of an advertisement.
- The
general cost of a CPM campaign is less than other advertising strategies such as CPC. The advertising companies by using the CPM method can get more impressions for less money. The advertising companies that use CPM strategies have a wider marketing campaign and focuses much on raising awareness of their product.
- CPM
strategies pave the way to raise awareness and brand recognition.
Cost per impression is one of the most effective online advertising strategies offered in media such as television, radio, or print, and also in online advertisements.
How to calculate CPM?
CPM can be calculated through the formula:
CPM = Total Amount Spent/ Total Measured Impressions × 1000
Impressions refer to the number of views on an advertisement or
a webpage.
For instance, if the total cost to run a campaign is $600, and
it receives 10,000 impressions, the CPM for the ad would be $60.
CPM= Total Amount Spent/ Total Measured Impressions × 1000
CPM= $600/ 10,000 × 1000
CPM= $60
Conclusion:
In conclusion, one may say that CPM strategies are more
beneficial than any other unit of measuring advertising cost as it costs less
and paves the way to raise awareness and brand recognition.
This is written by Syeda Areeba Fatima, a permanent contributor to our community.
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