Define Cost Per Thousand (CPM)

Define Cost Per Thousand (CPM)

Cost per thousand is a pricing model that charges the advertiser a fixed amount every time an ad is viewed one thousand times. This is also known as “cost per mille” or CPM. “Mille” is latin for thousand. This pricing model has one very appealing benefit which is its cost effectiveness. Start up businesses and other businesses who don’t have a large budget can benefit from using the cost per thousand model. They will pay the fixed amount when one thousand viewers have seen their ad, so they can rest assured their ad is doing its job. Getting exposure for a business, especially one that is just getting started, at a reasonable price is always going to be appealing.

How does cost per thousand work? As mentioned, for every one thousand views an ad gets, the advertiser will pay the predetermined fixed amount. If the previously agreed amount for one thousand views is $75.00, advertiser will pay the website publisher $75.00 when, and only when, there are one thousand impressions made to the web page the ad appears on. With this type of pricing model, clicks on the ad are not considered. This pricing model is about getting eyes on the ad. Even if only a small percentage of the 1,000 views lead to visits to the website and/or sales, it still comes out to enough to make it worth the cost per thousand advertising model.

The cost per thousand model is an easy way to get an ad seen by as many people as possible. Of course, it’s not guaranteed that an ad will be seem by one thousand different people, but the variety is enough to make a difference. Even if people aren’t paying close attention to ads, if they see them more than once, the brand in question is going to become recognizable to them. Seeing an ad two or three times might results in them finally clicking on the ad or doing on a search on a brand to see what it’s all about. They may even ask friends and family if they’ve heard of or dealt with the brand. This creates word of mouth and the ability to reach even more people who may not have seen the ad.

One of the downsides of the cost per thousand pricing model for advertising is that these ads may not be clear on mobile phones as the ads can take up space and the screens are small. In the long run, if only a handful of the ads are on mobile devices, it’s still a cost effective way to advertise a brand or product.

The cost per thousand pricing model is commonly used for online marketing, but also in magazines and on radio and television. It is a pricing model that measures the cost of displaying an ad on a web page. The greatest benefit of using this model is how cost effective it is. Using the cost per thousand pricing method is the ideal option for businesses that are new or have a budget to stick to.

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Define Cost Per Thousand (CPM)

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