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# What is CPM and how is it calculated?

## In today’s Growketing article, we will cover everything about one of the most rapidly growing forms of web advertising in recent years: CPM. CPM stands for “Cost Per Mille or Cost Per Thousand Impressions”, and it’s an increasingly common advertising model. In this model, the company or brand advertising their products pays for every thousand […]

### Matias Luis Carrillat

14.12.22 PPC 4 min
PPC

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# Advertising Campaigns # CMP # Digital Advertising # Profitability # Visibility

In today’s Growketing article, we will cover everything about one of the most rapidly growing forms of web advertising in recent years: CPM. CPM stands for “Cost Per Mille or Cost Per Thousand Impressions”, and it’s an increasingly common advertising model. In this model, the company or brand advertising their products pays for every thousand views their advertisement receives.

-The great advantage of this method is that once a thousand impressions are achieved, the advertiser is charged, regardless of whether users click on the ad or not.

-CPM is widely used in campaigns aiming for a massive reach, making it an excellent option for companies looking to establish their name, increase their presence, and gain popularity on the internet. It’s also a fantastic choice for new brands seeking to quickly establish their product in the market – CPM can be a perfect idea for gaining visibility.

-As previously explained, with this model, it’s not necessary for users to visit the advertiser’s website; simply viewing the ad generates the payment.

CPM: Formula for calculation

-A common question for those new to this advertising model is, “How is CPM calculated?” Fortunately, it’s quite simple! The formula can be summarized as follows: (Cost/Impressions) x 1000. For example, if you pay 50 pesos for 2000 impressions, the calculation would be: (50/2000) x 1000 = 25. This means that the price of your ad is 25 pesos for every thousand impressions.

How to thrive with CPM – Subtle and precise advertising!

Below are some tips to maximize the effectiveness of CPM advertising:

-Clear objectives: Before committing to any investment, it’s crucial to have a clear understanding of what you aim to achieve and what your objectives are. Do you want to promote your brand? Do you need more traffic on your website? Defining your goals is the first step before choosing the advertising campaign style and deciding if CPM is the right model.

-Relevant websites: If your goal is to position your company and gain visibility among potential customers, it’s important to choose appropriate sites to display your ads. For example, if you want to promote a sports apparel brand, it’s essential to place CPM ads on sports-related websites to target users interested in the topic.

-Simple and clear design: The primary focus of this type of campaign is to introduce your product, so it’s crucial that the ad design is simple and precise, providing enough information for users to become familiar with and remember the brand.

-Strategic placement: Finally, it’s necessary to plan ahead where the CPM ads will be placed on the web, as well as the viewing duration. In this way, we will ensure that the ad is viewed clearly.

Now that we know what CPM is and how to calculate it, let’s explore the benefits this method can bring to business growth:

-Visibility: The primary benefit of CPM campaigns is the visibility they generate. Opting for the CPM advertising model allows platforms like YouTube and Facebook to become spaces where you can capture potential clients and introduce your brand. CPM is an excellent alternative to quickly and effectively provide visibility and recognition to a company, as well as to open up to new markets.

-Credibility: By promoting your brand online and increasing your presence across various platforms, your company gains credibility and trust from the audience, two essential aspects for growth.

-Profitability: Typically, CPM advertising requires lower investment compared to other advertising models. Since the cost per impression is not high, it’s an excellent strategy for startup companies with a limited budget aiming to reach a larger audience and create a market niche without spending too much money.

-Relevance: Another advantage of the CPM method is the opportunity to run focused campaigns on relevant websites aligned with the product you want to promote. This ensures your ads reach users interested in your content and with the potential to become future customers.

-Recognition: Lastly, this advertising model not only generates recognition among the audience but also among other businesses, increasing the possibility of establishing new partnerships and relationships. Running a high-quality CPM advertising campaign with well-designed and eye-catching ads opens the door to significant benefits.

As we’ve seen, “cost per thousand impressions” is an increasingly popular option for increasing visibility and recognition on the web. At Growketing, we believe it’s an excellent choice for those taking their first steps in commerce. We hope this brief overview will be helpful when approaching future growth strategies.