CPM - what is it?

organizing a media and contextual advertising campaign on the network, any advertiser calculates its estimated budget.For the customer it is important to see the promotion as allocated funds for its implementation, as intended if the money is spent and the effectiveness with which they are used.The calculation of the efficiency of product advertising in media planning based on several indicators, one of which is the index of CPM.What kind of figure how to use it - find out below.

CPM - why is it necessary

What is CPM advertising, known since the last century.The module used in all advertising campaigns that took place in the media.Publishing houses, TV and radio stations still use this figure to calculate the cost of advertising.CPM is used in the case when it comes to the price of one unit does not display advertising destinations, and thousands of possible buyers.Then the same treatment was administered in this term.The owners of advertising platforms can only operate their circulation and thematic focus, therefore, was to identify indicators CPM, advertising, taking into account this value has been effective.

Defining CPM

simple definition of CPM - cost per thousand is.There is a module name from the English words Cost-Per-Thousand, where M - the Roman numeral, which means 1000. Thus, the question of what the CPM, can be answered, it is the price per thousand impressions of the advertisement.The more time there is advertising on the pages of newspapers and magazines, the more often it is played on the radio or read on the TV channel - the greater the rate of this factor.

calculation CPM advertising online campaigns on the Internet

role usually played ad banners - those annoying pop-ups, which are so popular with users, and which bring money to the owner of advertising platforms.The more popular the site, the more users are viewing this page of the Internet, the more expensive advertising on this site will cost the customer.

Advertisers interested in the largest possible number of users who saw the banner.Therefore, what is CPM, it can be shown mathematically thus:

CPM = (the total price of the advertising order) / (planned banner views per day) * 1000.

Now it is clear, CPM - what it is.In advertising, it is one of the most important indicators.An advertiser can calculate how much money you need to pay the owner of the site to ensure that the information has been shown one thousand users of the network.

Intuitively, this calculation can be illustrated by a simple example.The cost of placing a banner on the site of a portal is, for example, $ 400 a week, the statistics of the web pages show that a week browsing the site about 10 thousand. Users.Thus, a simple calculation gives the value:

CPM = $ 400/10 000 * 1000 = $ 4 per thousand impressions advertising information.

Advertisers should understand that a simple demonstration of a banner on the site theme is mostly informative.There is no guarantee that all ten thousand people visited the page, be sure to click on the banner.Will the visitor to link or not - depends on the attractiveness of the banner and the information that is placed on it.Each site is required to provide all the data of interest for the calculation of the parameter CPM.It is profitable to the site owner, you can understand.But advertising, its quality and interesting for the end user are included in the objectives of the customer.

auxiliary module CTR, calculation methods

to reduce costs should be considered another indicator - the index CTR.The name also comes from the English language and is completely sound like a click-through rate - CTR rate.CTR shows how many people clicked on the banner and went over to the customer page of advertising.This module depends on the correctness of the chosen site, because the more appropriate and necessary look advertising, the more likely that the visitor interested in information and clicks on the banner.The method of calculating this figure looks like:

CTR = (number of users who clicked on the banner) / (planned banner views per day) * 100%.

For example, if 20 thousand people who saw the advertisements, have followed a link 800 users, then the CTR is 800/20 000 * 100 = 4%, which is above the lower limit.

experimentally proved that the minimum CTR of 3-5%.If less, then the cost per potential customer to exceed the expected profit, and advertising will be considered ineffective.

Using indexes

CPM can be used when selecting a narrow target audience.For example, at the order of the banner-site playground provides advertisers with information on age, sex, place of residence, interests of all registered visitors.Thus the desired banner appears only for those users, which was designed this product advertising.The budget of the campaign thus spent more economically and more efficiently.

should also consider the activity of the permanent members.The more frequently the same visitor sees the same ad product, the more money advertisers are written off, but the customer at the customer from this no longer becomes.Therefore literate calculation indices CPM and CTR in conjunction with a deep analysis of the information provided by this advertising platform is to bring the desired results to the customer.

Another point that should be taken into account at the beginning of the campaign.Payment may be set or in terms of CPM, or CTR.In other words, the customer must understand the essence of advertising banners on the module CPM - that it is not a payment for the clicks of users, but only for the demonstration of product advertising


Asked what the CPM, answer is that this option isof the most important in the analysis of the effectiveness of a particular advertisement, and also must take into account when calculating the advertising budget.Taken into account and the number of alleged contacts with potential consumer advertising information, and the cost of placing banners on multiple sites with similar thematic focus.Given these parameters, it is possible to calculate the efficiency of a particular advertising platform and successfully master the advertising budget.