Cost Per Thousand (CPM)
Candlefocus EditorCPM is one of several methods used to price online ads. Different types of ad pricing methods include cost per click (CPC), cost per action (CPA), and cost per view (CPV). CPM tends to be the most common type of ad pricing, as it applies better to display and video advertising, rather than search ads.
However, one of the disadvantages of using the CPM model is incorrect impressions due to duplicate views, advertisement failure to load, and advertising fraud. This is because CPM does not differentiate between genuine impressions by a human and impressions made by automated robots. Despite this limitation, CPM remains the industry standard and is used by most online advertisers.
Generally, CPM expression serves as a key measure for success for online campaigns. That’s because, depending on the type of business and audience target, the cost can be lower (or higher) when comparing with the other ad pricing methods. Thus, CPM is the only way to generate actionable metrics to drive future decisions.
To conclude, CPM is a highly valuable approach used to price online ads and measure success for online campaigns. It is used when the goal of the company is to increase brand awareness by showing their ad to as many people as possible. Although it has the disadvantage of accounting erroneous impressions, it remains the most successful and widely used metric to measure ad success.