Cost Per Impression
Online Advertising
Cost Per Impression
Cost Per Impression is a phrase often used in
online advertising and marketing related to
web traffic. It is used for measuring the worth and cost of a
specific
e-marketing campaign. This technique is applied with
web
banners, text links,
e-mail spam, and
opt-in e-mail advertising. (Although
opt-in e-mail advertising is more commonly charged on a
CPA basis.)
The Cost Per Impression is often measured using the CPM (Cost
Per Mille) metric. (A CPM is the cost of one thousand (1,000)
impressions.)
CPM is considered the optimal form of selling
online advertising from the publisher's point of view. A publisher gets paid
for each ad that is shown.
This type of advertising arrangement closely resembles Television and Print
Advertising Methods for speculating the cost of an Advertisement. With
Television the Nielsen Ratings are used and Print is based on how many readers a
publication has. For a Website the numbers are a bit more exact due to the
TCP/IP nature
of the Internet.
CPM and/or Flat rate advertising deals are preferred by the
Publisher/Webmaster because they will get paid regardless of any action taken.
For Advertisers a Performance Based system is preferred. There are two
methods for Paying for Performance: 1)
CPA - Cost per Action/Acquisition and 2)
CPC
- Cost per Click Through.
Today, it is very common for large publishers to charge for most of their
advertising inventory on a CPM or
CPT basis.
A related term,
eCPM or
effective Cost Per Mille, is used to measure the effectiveness of
advertising inventory sold (by the publisher) via a
CPC,
CPA, or
CPT basis.
Cost Per Mille
The initialization CPM comes from print world (and is a latin word),
and stands for Cost Per Mille in the US or, more correctly, in the UK
Cost Per M, with M representing the Roman numeral for thousand. When
online advertising started gaining momentum, those in the industry used this
term (rather than something like CPI) as a metric for describing the
Cost Per Impression largely because advertisers were already familiar with
the term CPM.
It is important to remember that when someone says something like, "our CPM
is $5". That this means that the Cost Per Impressions is $0.005 -- half a
cent.
Further reading
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