It is the cost of a web advertising campaign directly related to the number of times an ad is displayed (impressions). It is usually the most common cost model used in brand recognition campaigns, also known as branding campaigns. This cost model ensures that the ad has been shown a number of times for which it is paid. CPM does not ensure visits or conversions, so it is not usually a good model to achieve objectives other than promoting or giving visibility to a product, service or brand.
Cost per thousand has its origins in advertising displayed on television, radio or print media, where advertising is sold based on the audience of the medium. The use of CPM on the Internet is much more reliable, since the technology makes it possible to measure the number of times an advertisement has actually appeared and the advertising cost bill is based on this figure.
The CPM in web portals moves approximately between 5 euros to 50 euros on average, depending on the traffic, the segmentation of the website, the banner format, the section and the place where the ad is published. For example, if the CPM of a website is 20 euros, this means that if an advertiser wants to buy 40,000 impressions in a month the total contract would be 40,000 impressions x 20 cost per thousand /1,000 = 800 euros.
If we consult the rates of Unidad Editorial (Expansión, Marca, El Mundo), we can see that the CPMs for the different types of ads vary from 3 euros per thousand impressions for a button to 110 euros per thousand impressions for a banner format called “Spot in news”. Most advertisements are between the amounts indicated above.
On advertising platforms such as Google AdWords is usually used in campaigns known as display campaigns, although it is increasingly advisable to use other bidding strategies due to the search for profitability in advertising and, to achieve it, it is easier to use methods such as CPC or CPA.
Even so, for campaigns whose strategy is to increase the viability of a brand, product or service, it is still a valid system.
In ad campaigns based on video ads, CPM is also used, although in AdWords it is referred to as CPV or cost per view.
As a comparison to traditional marketing, cost per impression (CPM) is what we are willing to pay for people to see our advertisement in mass media, such as outdoor advertising, television, print or radio.
Sources
http://www.unidadeditorial.com/Publicidad/images/Cpm/Tarifa_CPM_%202014.pdf
