Cost Per Mille
Encyclopedia
- ECPM redirects here. It is also short for European Christian Political MovementEuropean Christian Political MovementThe European Christian Political Movement, abbreviated to ECPM, is a political party at European level that unites national parties from across Europe that share Christian democratic politics. The member parties are generally more socially conservative and Eurosceptic than the European People's...
.
Cost per mille
Permille
A per mil or per mille is a tenth of a percent or one part per thousand. It is written with the sign ‰ , which looks like a percent sign with an extra zero at the end...
(CPM), also called cost ‰ and cost per thousand (CPT) (in Latin mille means thousand), is a commonly used measurement in advertising
Advertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...
. Radio
Radio
Radio is the transmission of signals through free space by modulation of electromagnetic waves with frequencies below those of visible light. Electromagnetic radiation travels by means of oscillating electromagnetic fields that pass through the air and the vacuum of space...
, television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
, newspaper
Newspaper
A newspaper is a scheduled publication containing news of current events, informative articles, diverse features and advertising. It usually is printed on relatively inexpensive, low-grade paper such as newsprint. By 2007, there were 6580 daily newspapers in the world selling 395 million copies a...
, magazine
Magazine
Magazines, periodicals, glossies or serials are publications, generally published on a regular schedule, containing a variety of articles. They are generally financed by advertising, by a purchase price, by pre-paid magazine subscriptions, or all three...
, out-of-home advertising
Out-of-home advertising
Out-of-home advertising is made up of more than 100 different formats, totaling $6.99 billion in annual revenues in 2008 in the USA. Outdoor advertising is essentially any type of advertising that reaches the consumer while he or she is outside the home...
, and online advertising
Online advertising
Online advertising is a form of promotion that uses the Internet and World Wide Web to deliver marketing messages to attract customers. Examples of online advertising include contextual ads on search engine results pages, banner ads, blogs, Rich Media Ads, Social network advertising, interstitial...
can be purchased on the basis of what it costs to show the ad to one thousand viewers (CPM). It is used in marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
as a benchmark
Benchmarking
Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and/or best practices from other industries. Dimensions typically measured are quality, time and cost...
to calculate the relative cost of an advertising
Advertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...
campaign or an ad message in a given medium
Mass media
Mass media refers collectively to all media technologies which are intended to reach a large audience via mass communication. Broadcast media transmit their information electronically and comprise of television, film and radio, movies, CDs, DVDs and some other gadgets like cameras or video consoles...
. Rather than an absolute cost, CPM estimates the cost per 1000 views of the ad. This traditional form of measuring advertising success can also be used in tandem with performance based models such as percentage of sale, or cost per acquisition (CPA
Cost per acquisition
Cost Per Acquisition is a method of advertising whereby the advertiser only pays whenan advert delivers an acquisition. Moreover, CPA is very effective for an advertiser to pay because they only pay when the advertising has met its purpose. The publisher relies on the conversion rate of the...
).
An example of computing the CPM:
- Total cost for running the ad is $15,000.
- The total audience is 2,400,000 people.
- CPM is calculated as CPM = ($15,000/2,400,000)*1000 = $6.25
Examples
- In online advertising, if a website sells banner ads for a $20 CPM, that means it costs $20 to show the banner on 1000 page views.
- While the Super BowlSuper BowlThe Super Bowl is the championship game of the National Football League , the highest level of professional American football in the United States, culminating a season that begins in the late summer of the previous calendar year. The Super Bowl uses Roman numerals to identify each game, rather...
has the highest per-spot ad cost in the United StatesUnited StatesThe United States of America is a federal constitutional republic comprising fifty states and a federal district...
, it also has the most televisionTelevisionTelevision is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
viewers annually. Consequently, its CPM may be comparable to a less expensive spot aired during standard programming.
Effective cost per mille
Effective cost per mille (eCPM) is used to measure the effectiveness of a publisher's inventory being sold (by the publisher) via a CPACost per acquisition
Cost Per Acquisition is a method of advertising whereby the advertiser only pays whenan advert delivers an acquisition. Moreover, CPA is very effective for an advertiser to pay because they only pay when the advertising has met its purpose. The publisher relies on the conversion rate of the...
, CPC, or CPT basis. In other words, the eCPM tells the publisher what they would have received if they sold the advertising inventory on a CPM basis (instead of a CPA
Cost per acquisition
Cost Per Acquisition is a method of advertising whereby the advertiser only pays whenan advert delivers an acquisition. Moreover, CPA is very effective for an advertiser to pay because they only pay when the advertising has met its purpose. The publisher relies on the conversion rate of the...
, CPC, or CPT basis). This information can be used to compare revenue across channels that may have widely varying traffic - by figuring the earnings per thousand.
Example:
- There are two banners: "Super Apps" and "Fantastic Apps".
- The publishers earn $1 per click.
- Both banners were published for the duration of one week.
- "Super Apps" was viewed by 2000 visitors from which 10 clicked on it.
- "Fantastic Apps" was viewed by 2000 visitors from which 50 clicked on it.
This shows that:
- "Super Apps" has an eCPM of $5 ($10/2000 * 1000)
- "Fantastic Apps" has an eCPM of $25 ($50/2000 * 1000)
See also
- CTRClick-through rateClickthrough rate is a way of measuring the success of an online advertising campaign. The clickthrough rate of an advertisement is defined as the number of clicks on an ad divided by the number of times the ad is shown , expressed as a percentage. For example, if a banner ad is delivered 100...
- Click-through rate - CPICost Per ImpressionCost per impression, often abbreviated to CPI or CPM for Cost per thousand impressions, is a phrase often used in online advertising and marketing related to web traffic. It is used for measuring the worth and cost of a specific e-marketing campaign. This technique is applied with web banners,...
- Cost Per Impression - PPCPay per clickPay per click is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher when the ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market...
- Pay per click - CPACost per acquisitionCost Per Acquisition is a method of advertising whereby the advertiser only pays whenan advert delivers an acquisition. Moreover, CPA is very effective for an advertiser to pay because they only pay when the advertising has met its purpose. The publisher relies on the conversion rate of the...
- Cost Per Acquisition or Action - Internet marketingInternet marketingInternet marketing, also known as digital marketing, web marketing, online marketing, search marketing or e-marketing, is referred to as the marketing of products or services over the Internet...
- CPC - Cost Per Click
- eCPA - effective Cost Per Acquisition
- Compensation methodsCompensation methodsCompensation methods , Pricing models and business models used for the different types of internet marketing, including affiliate marketing, contextual advertising, search engine marketing and display advertising.-Predominant compensation methods in affiliate marketing:The following models...