What is Cost per Thousand Impressions (CPM)?

As google describes, CPM is the amount you pay on an advertising platform per thousand views for your ad.

Cost per thousand impression formula

Cost Per Thousand Impressions, better known as CPM in the online marketing world, literally means "Cost per thousand". The thousand refers to the number of impressions. CPM is therefore the cost per thousand views.

Here one speaks mainly about the representations of a certain type of advertisement, usually in the form of a banner on a website or an advertisement on Facebook. CPM is usually applied when people want to increase brand awareness by displaying advertisements.

What are the benefits of CPM?

The biggest advantage of CPM is that a publisher (the person who places the advertisement on their site) has a very clear insight into the income (or expenses). You get to see how many times the webpage on which the banner is displayed on an advertisement has been visited and you also immediately know how many times the advertisement has been displayed.

Therefore, to increase income through CPM you have 2 options. On the one hand you can add more valuable content to your website so that you get multiple impressions of the advertisement. On the other, you can negotiate for a higher payout per 1000 impressions. Want our opinion? Go for both and achieve maximum results.

What to watch out for with CPM!

If you are an advertiser, you are going to create a banner or advertisement and look for relevant sites that want to display your advertisement. However, make sure that you properly negotiate the placement of your ad. It does not necessarily mean that if the page has been viewed 10,000 time, your ad has been viewed equally as many times.

You should actually view it as a piece of digital estate. And just like in the real estate world, only one thing is important: location, location and location. If your banner is at the bottom of a page, chances of it being seen with every page visit are much smaller. It is logical that you will pay less CPM for a bottom placement that with placement at the top of the page. So, establish well in advance where your advertisement will be placed and what you will pay for it.

How to calculate your CPM?

When it is time to prepare the invoice, you must of course first calculate the CPM. Fortunately this is not difficult at all.

As an example, suppose your page has been viewed 370,000 times and that you will receive 3.50 euro per CPM. Then the calculation of this is the following:

370,000 / 1,000 impressions = 370 x 3.5 = 1,295 euros