Cost per thousand (CPM) is the term used to indicate the cost of 1,000 impressions received from one advertisement.
What does it mean?
Cost:Total amount spent on advertisement
Total impressions: No of times ad was loaded on the page
Companies aim to achieve a CPM between $1 – $10 (In other words – spending $1-$10 to receive 1,000 impressions!) Using the CPM metric allows companies to see which advertising approach is working well, and which is using up all their marketing dollars.
Finding the perfect advertising method that will achieve the lowest CPM is not always easy. It is essential for companies to experiment and understand which approach their targeted customers respond best to.
Typically, direct mail generates the highest CPM at approximately $26 – $27. This is mostly due to the high costs that come with design and printing. On the contrary, social media advertisements can reach a CPM as low as $1. Mobile billboard advertising has a CPM as low or lower than $2. This makes mobile billboard rates extremely competitive when compared to any other method of out-door-advertising.