What is Cost per Thousand Impressions (CPM)?

As google described CPM is the amount you pay on an advertising platform per thousand times people see your ad.

Cost per thousand impression formula

Cost Per Thousand Impressions, better known as CPM in the online marketing world, means literally translated "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. You then pay an amount per 1000 views.

What are the benefits of CPM

The biggest advantage of CPM is that a publisher (the person who places the advertisement on his site) has a very clear insight into the income (or expenses). You simply 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.

To increase the income of CPM you therefore 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. Or you negotiate for a higher payout per 1000 impressions. Our opinion? Go for both and achieve maximum results.

What to watch out with CPM!

If you are an advertiser, you are therefore going to create a banner or advertisement and look for relevant sites that want to show your advertisement. However, make sure that you properly negotiate the placement of your ad. It does not mean that the page has been viewed 10,000, that your ad has been viewed 10,000 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, the chance is much smaller that it will be seen every time. It is logical that you will pay less CPM than with a position at the top of the page. So agree well in advance where your advertisement will be and what you pay for it.

How to calculate your CPM?

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

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

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