Saturday, July 13, 2024

What is cost per thousand? CPM

Imagine you have a website where you want to put up an advertisement.

The cost per thousand (CPM) is the price you pay for every 1,000 people who see that ad on your web page. It helps you understand how much it costs to show your ad to a lot of people.

For example, let’s say you want to advertise a new local event on your website, and the CPM is 50 Rand. This means for every 1,000 people who visit your site, you’ll pay 50 Rand to show them the ad. If 5,000 people visit your site, the total cost would be 250 Rand because you’re paying for every set of 1,000 visitors. It’s a way for you to figure out how much you’re spending to get your ad seen by more people.

What is an Impression? #

An impression in the context of banner advertising refers to the number of times an ad is displayed on a web page. Every time a user visits a webpage that contains the banner ad, it counts as one impression, regardless of whether the user clicks on the ad or not.

For example, if you have a banner ad promoting a local business on a popular website, each time the website loads and a user sees the ad on their screen, it counts as one impression. So, if the ad is displayed to 1,000 visitors, it would have generated 1,000 impressions, even if not all of those visitors clicked on the ad. Impressions help advertisers understand how many times their ad has been seen and can provide insight into the potential reach of their advertising campaign.

Example of how CPM Rate Works #

If the cost per 1000 (CPM) impressions is R80, this means for every 1000 impressions, the advertiser pays R80.

To find out the cost for 50,000 impressions, you can divide the total number of impressions by 1000 and then multiply the result by the cost per 1000 impressions (CPM).

So, for 50,000 impressions: 50,000 / 1,000 = 50

Now, multiply this result by the cost per 1000 impressions (CPM): 50 x R80 = R4000

Therefore, for 50,000 impressions at a cost per 1000 (CPM) rate of R80, the total budget for the advertiser would be R4000.

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