CPM Cost Model (Cost Per Mille)
It is one of the cost models. CPM stands for ‘Cost per mille’ (thousand) impressions.
What is CPM?
In the CPM cost model, an advertiser pays a publisher for each 1,000 impressions (ad views). In latin, a thousand is called ‘mille’. A variation of this cost model is CPV, or cost per view.
CPV times one thousand equals CPM. Read More.
CPM does not guarantee clicks or conversions but it does guarantee a flat price for a lot of ad visibility. When an advertiser curates the placement inventory with blacklists and whitelists to make an ad visible only on profitable spots, CPM allows for high ROI with costs being under control.
Why is CPM better than CPC?
CPM is more predictable, as it drives more traffic towards an advertiser’s ads for a fixed price. When a sudden influx of visitors occurs, an advertiser that uses CPM doesn’t experience increased costs that come with the CPC cost model.
60% of campaigns were set to Voluum DSP Auto–Optimization. As a result, eCPA decreased by 37% and iCTR increased by 42%Read more
What campaigns is CPM best for?
CPM is great for the two types of campaigns:
- Brand awareness, when visibility of the brand matters the most. In such a case, an advertiser strictly pays a fixed price for making their ad, and a brand, visible on the Internet.
- Performance campaigns that are aimed to get visitors to take actions, such as purchasing a product or installing an app. In such a case, predictable pricing allows for easy scaling and cost reduction that would otherwise grow proportionally to user engagement.
As appearing on the right placement is crucial for reaching and maintaining positive ROI, blacklists and whitelists are a must. To create one, you need to test a placement first. Depending on the campaign type, you have to leave your campaign running for a few days and make sure that a placement has spent at least three times the payout before its performance can be assessed.
Put good placements into a whitelist and use it as a basis for future campaigns. Put bad placements into a blacklist and use it to exclude these placements from buying in all your future and current campaigns. Read More.
Ad views vs page views
Although it may seem as if the numbers of ad views and page views should be the same, it may happen that these numbers are different. An ad may be placed in several spots on a single page, so the system may record a separate ad view for each placement while still recording one page view.
It may also happen that an ad is placed below the fold, so a part of a web page that is visible without scrolling. A visitor may not scroll below, so a page view will be recorded without a corresponding ad view.