Cost per Mile (CPM)

January 7, 2023 2023-01-27 10:12

What is Cost per Mile (CPM)?

Cost per Mile (CPM) also known as Cost per Thousand is an ad pricing model where brands and marketers pay for a thousand impressions of their ads. This pricing model is often used in email marketing, as it allows the advertiser to reach a large audience for a relatively lower cost.

Factors affecting Cost per mile

There are many factors that can affect the cost per mile (CPM) of an advertising campaign. Some of the most common factors include the following:

  • Type of media that is being used. For example, television advertising generally gives a higher CPM than print advertising.
  • Media outlets being used to run ads. For example, advertising on a major network television station will generally have a higher CPM than advertising on a local cable television station.
  • The time of day or week that the advertising is being aired. For example, advertising that airs during prime time television hours will generally have a higher CPM than advertising that airs during late night hours.
  • Target audience of the advertising. For example, advertising that is targeting a general audience will generally have a lower CPM than advertising that is targeting a specific demographic group.
  • Geographic area that the advertising is targeting. For example, advertising that is targeting a national audience will generally have a higher CPM than advertising that is targeting a specific city or region.

Importance of Cost per Mile in detail

In marketing, cost per mile (CPM) is a key metric used to determine the cost effectiveness of an advertising campaign. CPM is calculated by dividing the cost of the ad campaign by the number of impressions (in thousands). The resulting number allows marketers to compare the cost of different ad campaigns and determine which is the most cost effective. CPM is a useful metric for both online and offline advertising, and can be used to compare the cost of different media, such as television, radio, print, and digital. CPM payment method is also preferred when a brand wants to run a retargeting ads campaign.

Formula to calculate CPM

CPM = Money Spent on Ads X 1000 / Total Ad Impressions