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What is CPM? – CPM vs. CPC

What is CPM? – CPM vs. CPC

CPM is a term used in web advertising. The term is the abbreviation for cost-per-thousand impressions. CPM is often used in online advertising and marketing, which has something to do with driving traffic to a certain website. To calculate the worth or cost a particular e-marketing campaign, advertisers make use of CPM.

The word impression in CPM means the times an advertisement appears in a website. CPM is different from CPC or cost-per-click advertising. In CPC, a website is charged for advertising cost when someone clicks on an advertisement. CPM is considered to be more cost-effective than CPC since a business or website owner is paying a set fee per 1,000 impressions.

With the many gimmicks introduced in web advertising, CPM may take on a few different forms. The advertisement may be in a form of banner that can be seen on the top, side or bottom of a particular website. Text-based ad is also another form of CPM advertising, which is considered to be more effective than CPC.

The observation why CPM outperforms the CPC is that web visitors need not click the ads to view it. The ads are right on their screen and are readily available for reading or viewing. Just by the mere presence of the advertisement, CPM works even without the viewers clicking the ads. Moreover, it is also observed that web surfers often scan the webpage for something that might interest them. Clicking an ad for further information is not that appealing to web viewers.

When it comes to cost, CPM is also more appealing because a website will have to pay in bundles of 1,000 impressions. CPC can be more costly for a business owner since it will be difficult to control the clicks. Sometimes, fake clicks are being done by ad publishers to earn commissions from displaying third-party ads on their websites. Unlike in CPM, displaying ads is more targeted that advertisement views are more difficult to fake.

However, even though CPM has its own advantages over the other internet advertising types, it still has its own drawbacks. Sometimes, website owners think that CPM is cheap since they are buying in bundles of 1,000 impressions. However, some advertising companies require a minimum purchase amount. The drawback here is that when a minimum purchase goes over just the right amount of impressions the website needed.

Instead of getting a cheaper advertising, the budget goes overboard. Moreover, the company will be forced to pay for impressions it does not need. To understand it better, take for example a $10 cost of advertisement per 1,000 impressions. If a CPM company sets a minimum purchase of 500,000 impressions it will cost the website owner $5000, which can be too costly.

Fortunately, there are many companies offering CPM advertising. The cost-per-impression varies from company to company. The internet is an unending source of options. Finding another company that can offer lower price of CPM advertising is not difficult. However, although cost is significant for businesses, one thing must also be considered and that is to target the advertisement so that it effectively gets through to the customer base.

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1 Response for “What is CPM? – CPM vs. CPC”

  1. Thanks for this useful Definition of CPM. Just One question, What is the Word of M in CPM?

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Posted by Jodel X on Jan 25th, 2011 and filed under Computer, Internet. You can follow any responses to this entry through the RSS 2.0. You can leave a response via following comment form or trackback to this entry from your site