CPM, or cost-per-thousand, is the price you pay for 1,000 impressions on a given platform. M is the Roman numeral for 1,000. CPM is one of the most common ways of buying media digitally, but it can also be used to buy from other channels or compare the cost of a campaign on an equal field. Calculating CPM is a fairly simple process as shown below:
1. Get the Word Out
CPM campaigns are great when your primary goal is to spread awareness about your brand or product. When your audience hasn’t quite entered your sales funnel, or you want to get in front of as many people as possible, buying in this way achieves that quickly; generating interest and a desire to seek more information. CPM buys also make a great addition to campaigns with vendors that are not typically digitally focused but have those as available options, such as TV or Radio vendors. The straightforward nature of buying per thousand impressions makes for easier performance tracking and negotiation while allowing you to reach a larger audience base.
2. Compare All Channels
One of our favorite benefits of buying on a CPM basis is the ease of comparing the cost of reaching our desired audience across a variety of platforms. It’s particularly helpful when comparing digital space to more traditional channels like billboards, TV and even movie theaters. TV ratings can be converted to impressions as well as DECs for billboards. Looking at your various channel budgets in this way allows an apples-to-apples comparison of the cost to reach your audience, thereby easily identifying the best bang for your buck.
3. Explaining to Clients
With hundreds of different metrics floating
around from reach and frequency to daily effective count to rating points, it
can be challenging to explain your budget strategy. Much like what we discussed
in the point before, having everything on a flat 1:1 comparison makes it much
easier to explain how many people are seeing your ad (considering reach and
frequency) and the cost to reach them. Clients won’t feel overloaded with too
much and too complex information. This way, they can focus on what matters most
to them and you can focus on making the most of your budget.
Facebook: Check out the first blog in our four-part series on media buying! Today we look at the 3 Reasons to Use CPM When Buying Ad Space, stay tuned for more.