CPM (Cost Per Thousand Impressions) measures the cost of displaying an ad to 1,000 users. It’s ideal for increasing brand visibility without requiring clicks.
CPM (Cost Per Thousand Impressions) is a digital advertising metric used to measure the cost of displaying an ad to a thousand potential viewers. The “M” in CPM comes from the Roman numeral for one thousand, signifying that the metric represents the cost of one thousand impressions of an ad, whether those impressions lead to clicks or not. CPM is widely used in display advertising, particularly for campaigns focused on brand awareness or visibility, rather than direct clicks.
In the context of organic search and SEO, while CPM is primarily a paid search or display ad metric, it provides valuable insights into the cost structure of paid media campaigns, especially when combined with SEO efforts. By understanding how CPM works, digital marketers can assess the relative cost of getting impressions through paid advertising versus organic search rankings, where there is no direct cost per impression.
How CPM Works
CPM is calculated based on the total cost of an advertising campaign divided by the number of impressions (in thousands) the ad generates. For example, if an advertiser spends £500 for 100,000 impressions, the CPM would be £5. This calculation helps marketers gauge the efficiency of their advertising spend by determining the cost of reaching a large number of people with their ad content.
CPM in Google Ads
While CPM is often associated with display networks and social media platforms, it can also be a relevant metric in Google Ads. Advertisers can choose to run campaigns using the CPM model, where they pay for exposure (impressions) rather than clicks. This is particularly useful for campaigns aimed at building brand awareness rather than generating immediate direct responses.
CPM vs. CPC
CPM is different from CPC (Cost Per Click) in that it focuses on the cost for every thousand impressions, rather than clicks. In CPC campaigns, you only pay when someone clicks on your ad, whereas in CPM campaigns, you pay for the opportunity to display the ad to users, regardless of whether they click. Therefore, CPM is more suited for campaigns that aim to maximise visibility and brand recognition rather than driving immediate user action.
CPM’s Role in Organic Search Strategy
Although CPM is a paid advertising metric, its relevance to SEO comes from its ability to help marketers understand the cost of getting visible in SERPs (Search Engine Results Pages). By comparing the cost of paid visibility (via CPM) with the potential organic visibility of a website, SEO specialists can better assess the long-term value of investing in organic strategies versus paid campaigns. SEO’s cost per impression is effectively free, but the effort involved in ranking organically can often be substantial.
When to Use CPM
Advertisers may opt for CPM when their goal is to maximise exposure or when the target audience is large and the content is designed for awareness rather than immediate engagement. This is commonly used in industries with a broad reach, such as consumer products, entertainment, or general services.
Benefits of CPM
Brand Visibility: CPM is a great way to increase brand exposure to a wide audience without requiring immediate clicks.
Fixed Costs: Since the cost is based on impressions, the advertiser knows how much they’ll pay for reaching a thousand people, helping with budgeting.
Suitable for Large Audiences: CPM is ideal for campaigns aimed at reaching a broad audience quickly, especially in the early stages of marketing or product launches.
Limitations of CPM
No Guaranteed Action: While CPM ads can reach a wide audience, there’s no guarantee that those impressions will lead to clicks, conversions, or sales.
Ineffective for Immediate Results: If your goal is to drive traffic or sales immediately, CPC or other conversion-based models might be more effective.
Higher Costs in Competitive Markets: In competitive industries, CPM costs can rise significantly, especially if there is high demand for ad space.
CPM in SEO Strategy
While SEO doesn’t directly rely on CPM, understanding this metric can still inform your SEO strategy. By comparing the cost of paid impressions with the long-term value of organic search traffic, you can decide where to allocate resources more effectively. For example, if you see that your organic rankings are performing well but paid ads using CPM are also driving substantial exposure, it may be worth investing more in SEO efforts to maximise long-term organic traffic.
Conclusion
CPM (Cost Per Thousand Impressions) is a key metric in digital advertising that measures the cost of showing an ad to a thousand users. While primarily used in paid media strategies, it is valuable for assessing brand visibility and understanding the costs associated with advertising. By understanding how CPM works, you can better integrate it into a broader marketing strategy, balancing the paid and organic elements of your campaigns for maximum impact.
CPM is a metric that measures the cost of displaying an advertisement to 1,000 users, often used in display advertising campaigns.
CPM is calculated by dividing the total cost of the ad campaign by the number of impressions (in thousands) it receives.
CPM is primarily used in display ads, video ads, and social media ads, where the goal is brand visibility rather than direct clicks.
A high CPM means the cost to reach 1,000 users is expensive, often due to competition for ad space or high demand for the target audience.
While CPC is based on the cost per click, CPM is based on the cost for every 1,000 impressions, regardless of whether users click the ad.
Factors such as the platform used, audience targeting, ad placement, and ad quality can all impact the CPM rate.
CPM is ideal for brand awareness campaigns where the focus is on impressions and visibility, rather than immediate conversions.
Improving your ad targeting, increasing ad relevance, and optimising your ad quality can help lower your CPM by improving performance and reducing costs.
Yes, Google Ads allows advertisers to choose CPM as a bidding option, especially for display network campaigns.
If your goal is to increase visibility and awareness, CPM is a good choice. However, if you’re aiming for direct conversions, CPC might be more effective.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://seoconsultant.agency/define/cpm-cost-per-thousand-impressions/
- Modern Language Association (MLA):CPM (Cost Per Thousand Impressions). seoconsultant.agency. TSCA. December 05 2024 https://seoconsultant.agency/define/cpm-cost-per-thousand-impressions/.
- Chicago Manual of Style (CMS):CPM (Cost Per Thousand Impressions). seoconsultant.agency. TSCA. https://seoconsultant.agency/define/cpm-cost-per-thousand-impressions/ (accessed: December 05 2024).
- American Psychological Association (APA):CPM (Cost Per Thousand Impressions). seoconsultant.agency. Retrieved December 05 2024, from seoconsultant.agency website: https://seoconsultant.agency/define/cpm-cost-per-thousand-impressions/
This glossary post was last updated: 29th November 2024.
I’m a digital marketing and SEO intern, learning the ropes and breaking down complex SEO terms into simple, easy-to-understand explanations. I enjoy making search engine optimisation more accessible as I build my skills in the field.
All author posts