![]() Multimedia marketing such as display ads, YouTube ads, podcast ads, and others charge on a CPM basis. But CPM can be a misrepresentation of what marketers are actually trying to measure: attention. Variations of CPM: eCPM and vCPMĪ picture CPM is worth a thousand words impressions. A CPM is worthless unless you understand the conversion rate of those impressions. Marketers must understand the importance of impressions and especially the number of impressions required to convert prospects into customers based on their industry, business, or product. ![]() If a banner display ad campaign costs $50,000 and garners 10 million impressions, the CPM would be $5. Let’s clarify this formula by working through an example. The formula to calculate cost-per-thousand impressions is as follows:ĬPM = Total Campaign Cost / (Total # of Impressions / 1,000) If your cost per thousand impressions is a large portion of your customer acquisition cost on a given marketing channel or platform, you should weigh your marketing alternatives. Most marketers would agree an important metric to track is your CAC:LTV ratio, but another important consideration is the percentage your CPM comprises your CAC. As mobile marketers, we must understand our campaign costs closely and have the growth to justify the CPM. It’s like shorthand, since expressing individual costs per impression would become tedious and, in many cases, represent fractions of a penny. The Roman numeral for 1,000 is also “M.” So what exactly does this CPM do for us as marketers? CPM is a way to measure marketing expenses for large numbers of impressions. CPM actually stands for “cost per mille” - not like a rental car’s cost per mile, but cost per mille with two Ls - which means “thousand” in Latin. In online advertising and digital marketing, CPM is the cost-per-thousand-impressions or simply the price a marketer would pay to receive 1,000 campaign impressions. CPM, for example, is cost-per-thousand, so what does CPM actually mean? Why is there an “M” If CPM stands for cost-per- thousand? What CPM Means? In rare cases, however, the acronym and the definition don’t quite sync up. Did you know that “scuba” and “laser” are both acronyms? They stand for “self-contained underwater breathing apparatus” and “light amplification by stimulated emission of radiation,” respectively.
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