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CPM is a number that will tell you just how much you spend to get 1,000 impressions. It is a number that will always be a dollar amount.
The formula for CPM is rather simple.
Let's say you want to calculate your CPM for the first quarter of the year. You go back and see your total ad spend for that timeframe was $45,000 and your ads got 215,000 impressions during that time.
To get your CPM you would do the following: CPM = (1000 * 45,000) / 215,000. The result will be $209.30 per 1,000 impressions.
A good CPM varies based on the industry you are in, the type of ads you are running (display, search, social media, etc.), and other factors. Generally, search ads with a CPM around #35 - $40 are considered to be good. But this does not mean anything higher than that is bad for a business.
CPM is short for Cost Per Mille, but it is much more commonly referred to as cost per thousand.
A CPM of $15 means you must pay about $15 when advertising to reach 1,000 impressions. Essentially you are paying $15 for every 1,000 people that see your ad on their screen.
No, CPM can not be lower than zero.
A high CPM means you are spending a lot of money just to get 1,000 impressions, it can be a sign that your ad targeting strategy may be poor. You may be targeting a very high ticket niche, a competitor may be pricing you out essentially, or your keyword targeting is very poor. There are a number of other reasons your CPM can get very high but it can very well be an indicator that your ads need work.
Create Date: July 18, 2024
Last Modified Date: July 18, 2024
