As an advertiser and marketer, it's important to understand the impact of your campaigns and content on your target audience.
It's also important to know how much money you need to invest to ensure those campaigns and content are actually seen by your audience.
You may have heard of CPM before — it's a formula and metric that tells you exactly that.
In this article, we'll review what CPM is, how to calculate it, and tips on how you can get the best CPM.
CPM in marketing is cost per thousand, also known as cost per thousand impressions or cost per mile. It's a formula that calculates the total ad spend per 1,000 impressions on a web page.
How does CPM work?
CPM is often used in advertising, marketing campaigns, social media, and digital marketing. It tells you the total ad spend for every 1,000 impressions. An impression in CPM is how many views/ engagements an ad receives — it's when an ad is successfully displayed to a visitor or audience member on a web page.
Impressions are small units of measure in marketing which is why they're calculated by the 1,000 — this gives advertisers and marketers a better idea of the impact their work is having on audience members.
CPM is an effective top-of-funnel strategy because it helps advertisers garner a lot of attention from a large audience on one piece of content, all on a pre-determined budget.
As a result, you'll increase brand awareness and recognition as well as develop an understanding of which ads and content types are most successful among your audience so you can improve upon
Advertisers often use CPM. They select an ad publisher to work with based on where they want their ads published and the specific audience they want to get those ads in front of. Then, advertisers pay the ad publisher, often $1-$10+, for every 1,000 ads that are displayed to viewers.
This method of advertising allows advertisers to stick to a set budget while ensuring their target audience is seeing their ads and campaigns on a large scale. Especially when used on mobile — CPM ads are an effective way for advertisers to determine the impact of their in-app ads.
How to Calculate CPM
To calculate CPM, you need to use the following formula which states CPM is equal to the total amount spent/ total ad spend divided by total impressions multiplied by 1,000.
How to Get the Best CPM
There are a number of tips and techniques you can apply to help you get the best CPM possible — here are some examples.
1. Choose an ad network.
There are several networks and publishers available for your CPM ads. Here are five popular options:
- Google AdSense: Video ads, mobile ads, display ads, text, in-feed ads, in-article ads, matched content ads, games ads
- Criteo: Digital ads, contextual ads, mobile app ads, dynamic ads, video ads, self-service ads
- BuySellAds: Native ads, sponsored content, podcast ads, display ads
- Media.net: Contextual ads, display ads, native ads,
- SmartyAds: Rewarded videos, native ads, banners
2. Pick an ad tool.
You'll also want to identify a CPM and ad tool to help you plan, run, monitor, and analyze your campaigns.
CPM software is typically ad software — meaning it can help create, publish, and report on your ads.
For instance, you might choose to use HubSpot Ads Software to support your CPM strategy.
HubSpot is unique because it enables CRM-powered marketing — meaning, you can use the data from your CRM to create personalized and targeted ad campaigns and report on the ads that are turning prospects into customers.
With HubSpot Ads Software, you can also...
- Segment audiences.
- Personalize ads.
- Report on leads and ROI generated by every Facebook, LinkedIn, or Google ad.
- Understand attribution of revenue from specific ad campaigns and platforms.
- Log lead information into your CRM automatically.
- Create journey-based advertising campaigns for Facebook audiences.
How to Apply CPM Software to CPM Ads:
Here are some specific examples of how you could apply a tool like HubSpot Ads Software to your CPM strategy and ads.
- Refer to your contact data to effectively target your audience.
- Apply the results of past campaigns to create ads that you know will resonate with your audience.
- Use the knowledge you've gathered from your CPM campaigns about what works best among your audience to create and share more specific campaigns through HubSpot (since CPM campaigns are broad — more on this below).
- Review your CPM results alongside your attribution of revenue from your other ads and campaigns in HubSpot to determine overall ad spend versus your budget.
- Input contact data gathered from CPM ads in HubSpot so all contact and customer data across the entire business are organized in a single platform.
3. Use CPM in broad ad and marketing campaigns.
CPM campaigns are best for broad marketing ads and campaigns. That's because their main function is raising brand awareness and recognition. They offer the insight and data businesses need to then get more specific with follow-up ads and who they're targeting with those ads.
4. Highlight your point of difference.
Since your CPM ads are bound to be broad, be sure to highlight your product's point of difference.
For instance, if you're running a CPM ad on a training sneaker, ensure your ad makes the training shoe's unique feature(s) (e.g. it's ideal for all CrossFit athletes for X reason).
5. Think about ad format and placement.
When it comes to your CPM ads, it's critical you consider ad format and placement.
Perform research on your buyer personas and target audience as well as competitive intelligence— this will provide an understanding of what will work best among your audience as well as what's working well for your competitors.
This research will also help you decide which ad publisher you'll use to share your CPM ads based on the audience you can target via that publisher as well as the format in which you can publish your ads (e.g. display ads, mobile ads, etc.).
6. Consistently analyze your results.
Similar to all strategies in business, you need to analyze your results. Be sure to track the success of your CPM ads and campaigns — report on what's working and what isn't hitting the mark.
You can do this by calculating your CPM regularly (while ads are live and once campaigns end), sharing that information with team members, and iterating as needed. Most ad software also has reporting capabilities that can help you track, record, store, and share CPM results.
Start Calculating CPM
CPM is a valuable metric for marketers and advertisers — it gives you an accurate understanding of your impressions.
As a result, you'll gain insight into your level of brand awareness, which of your content and campaigns are being viewed the most, and what's working well among your audience.