Understanding CPM and buying reach efficiently
Cost per Mille is the standard for awareness campaigns – but reach alone doesn't make successful advertising.
Cost per Mille (CPM) is the standard currency for display advertising and awareness campaigns. 'Mille' comes from Latin for 1,000 – you pay per 1,000 impressions of your ad.
CPM vs. CPC: Making the right choice
With the CPM model, you pay for impressions regardless of whether users click. With the CPC model, you only pay for clicks. CPM is suitable for branding and awareness, CPC for performance and direct conversions.
Calculate the effective CPM (eCPM) from CPC campaigns: eCPM = CPC x CTR x 1,000. This allows you to compare both models.
Factors that influence CPM
CPM varies significantly by platform and context:
- 1 Platform: LinkedIn is more expensive than Meta, Meta more expensive than display networks.
- 2 Target audience: Narrow, valuable audiences have higher CPM.
- 3 Format: Video CPMs are higher than static banners.
- 4 Seasonality: Q4 (Black Friday, Christmas) has the highest CPMs.
Viewability: The hidden CPM component
Not every impression is equally valuable. Viewability measures whether your ad was actually in the visible area. A low CPM with 30% viewability is more expensive than a higher CPM with 80% viewability when you calculate the viewable CPM (vCPM).
Pay special attention to viewability metrics with programmatic advertising. Many cheap impressions come from poorly visible placements or are generated by bots.
CPM in the marketing mix
CPM-based campaigns are ideal for the upper funnel: building brand awareness, reaching new audiences, launching products. Combine them with CPC-based performance campaigns for the lower funnel and measure overall success via ROAS or MER.