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What are CPM Ads?

By-Naman Agarwal

April 17, 2020

CPM stands for Click Per Miles. It is also known as Cost per thousand. The letter “M” in CPM represents the word “mille,” which is the Latin translation of the word “thousands”. These are the terms that denote the price of 1,000 advertisement impressions on one webpage. If any publisher charges $2.00 CPM for his website. Then an advertiser must pay $2.00 for every 1,000 impressions of its ad.

What’s Cost Per thousand means?

CPM is the most used method used for pricing web ads. Cost Per Thousand is the expanded term of CPM which is also known as cost per mille. Advertisers regularly measure the growth of a CPM campaign by its click-through rate(CTR). That is the percentage of people who saw your ad upon the number of people who clicked on it. Let’s understand whit an example, an advertisement that receives 4 clicks for every 100 impressions has a 4% CTR. We cannot measure an advertisement’s success by CTR alone because an ad that a reader views but does not click may still cause an impact.

what is cpm ads
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Page Views vs. Impression

This is also possible that the number of visitors to different from the number of ad impressions to the website displaying the ad. Let’s take an example for better understanding, an ad might receive placement in two locations on a website, suppose as a horizontal banner across the top of the page and a side banner in the widget alongside the page’s text. In this case, the advertiser has to pay for two impressions per page view. So here the impression count will be 2 and the page count will be 1 only. So, this is how both are different.

CPM vs. CPC and CPA

CPM is one of several methods used to give an estimated price for website ads. Another pricing models include cost per click(CPC), where the advertiser pays each time a website visitor clicks on the ad displayed in the website or on google search this is the highest cost consuming method, and another on is the cost per acquisition, where the advertiser only pays each time a website visitor makes a purchase after clicking an ad displayed in the website or on google search.

Different pricing methods are more appropriate for some ad campaigns than others. CPM is the best way for a campaign focused on heightening brand awareness or delivering a specific message. In this case, the CTR is less useful, because the exposure from having an ad prominently placed on a very high-traffic website helps promote a company’s brand name or message, even if visitors do not click on the ad.

Most of the Website owners love CPM advertising because they get paid for just displaying ads. This is because CPM rates are low. The $2.00 price mentioned above is fairly standard—a website needs to boost traffic to make decent money from CPM ads.

Companies focus less on mass appeal. But more on promoting a product to a niche audience gravitate toward CPC or CPA advertising because then they only have to pay when visitors click through to their site or purchase the advertised product either they don’t have to pay any amount.

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what is CPM
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Written by -Naman Agarwal
Hi, I am Naman Agarwal the owner of NalFrost. A blog that helps you master the art of Blogging. Join our Telegram Community and stay connected with other like-minded bloggers.
1 Comment
  1. Shuvham

    thanks for this I was looking to know more

    Reply
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