CPM
CPM - pay per thousand impressions (in online advertising). The abbreviation comes from lat. Cost per Millennium, which means "price per thousand."
The model is used in Internet marketing along with others: CPC (cost per click) and CPA (cost per action). The peculiarity of CPM is that this principle did not appear on the Internet, but came from other media. This is how newspapers, magazines, television work. The model does not initially include an assessment of the effectiveness of the ad - it is paid for showing a wide audience.
CPM depends on:
the cost of placing ads on a specific advertising platform (we denote C = Cost, price);
the number of visitors to the site (we denote U = Users, users).
If you know both parameters, you can calculate and compare the effectiveness of different sites. To do this, use the formula: CRM = C / U * 1000.
For example, the cost of placement on the site is 20 thousand rubles. per week, and the average number of visitors during this period is 25 thousand people. CRM \u003d 20,000/25,000 * 1000 \u003d 800 rubles. for 1000 impressions.
Importance of CPM
This indicator is necessary for a more accurate assessment of the page's profitability. If CTR (click through rate) reflects qualitative characteristics, then CPM reflects quantitative ones. For example, if the site had 1,000 impressions and only 10 clicks, or 10,000 impressions and 100 clicks, the CTR will be the same - 0.01. To calculate the exact amount of profit taking into account the cost per click, a CPM is required.
In the event that the CPM model pays off, it is easier to work with it than with CPC and CPA: the advertiser receives a guaranteed number of impressions, and you can always calculate how much a click costs. With cheap traffic, the cost per click in CPM is usually lower than in CPC.