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CPM: An Important Metric in Online Ad Campaigns
If you are running an online advertising campaign, then CPM (cost per mille) is one of the important metrics that can determine the success of your ads.
By looking at the CPM numbers, you can also compare your ad performance across various platforms to determine which channel is the most effective for achieving your marketing goals.
Therefore, you need to understand what CPM is in online advertising and learn how to optimize it so that your ads can get better results.
What is CPM?
CPM stands for cost per mille, which is Latin for a thousand. CPM is a measure that shows how much advertisers spend for every 1,000 impressions (number of impressions) that the ad gets.
If the advertiser bids to pay up to ₦30,000 CPM, it means the advertiser will pay ₦30,000 for every 1,000 impressions of the ad, or IDR 30 for each impression.
Why is CPM Campaign important?
CPM marketing will usually be more affordable when compared to ads with CPA or CPC optimization. However, of course, the costs required will still depend on the platform used and the audience coverage of your ad.
Bids from your CPM campaign will certainly be more expensive if served on a more popular website or to a specific audience.
Here are some other reasons why CPM campaigns are important to run:
- Increase awareness: because it is cheaper, you can serve ads to a wider audience so that your brand can be recognized by more people.
- Generating social buzz: If the content used in the CPM campaign is quality and interesting, then the audience will not hesitate to share your ad content on their social media.
How to Calculate CPM
Use the simple steps below to calculate CPM:
1. Determine the Advertising Budget
Determine how much budget you want to spend on your online advertising campaign. For example, the budget you allocate for advertising is ₦5,000,000.
2. Determine the Number of Impressions Desired
Next, also determine the number of impressions you want to get from the ad.
For example, say you are targeting to get 250,000 impressions from an advertising campaign.
3. Calculating CPM
To calculate CPM, you just need to divide the cost of the campaign by the number of target impressions and multiply by 1,000.
If taken from the scenario above, then the CPM figures can be obtained from:
The advertising budget of ₦500,000 is divided by the number of target impressions of 250,000, which is 20, then multiplied by 1000 to make 20,000.
So, the target CPM of your campaign is ₦20,000.
How to Optimize CPM
Currently, many online advertising platforms, both search engines and social media, offer advertising services with CPM optimization settings.
But regardless of the platform used, you can apply some of the tips below to optimize the CPM number of your ad campaign:
- Target the right audience: Targeting the right audience can ensure your ad spend isn't wasted.
- Monitor ad serving frequency: Make sure your ad doesn't appear to the same person more than twice.
- Add social proof: Convince your audience that the products you offer are of high quality by collaborating with KOL or sharing customer reviews of your products.
Conclusion
From the discussion above, it can be concluded that CPM measurement has a crucial role in running online advertising. Without a CPM measurement, you will not be able to know how effective your ad is in increasing the reach of your brand.
However, in addition to CPM, there are other online advertising metrics that are no less important and should not be ignored. In essence, any measurement and monitoring that you do on your online advertising should be based on the main objective of the ad campaign.
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