What Is CPM, Cost-Per-Mille?
Cost per Mille is another way of saying cost per 1000 and is regularly used when it comes to online advertising. Any sort of advertising that will reach a lot of people can be calculated this way and as well as online, it can be used for television, radio and the printed word. It is the way that the true cost of an advertising campaign can be calculated.
The way that this works is easy. Normally referred to as the CPM, the cost is worked out by dividing the cost of the advertising campaign by the number of people who became involved as a result of it. The figure is expressed in 1000’s and this makes it easy to compare it with the success or failure of other campaigns.
In some cases it is hard to work out an exact figure –a TV advert may be seen by 1 person in a household or the entire household. Here the figure is worked out as an estimated view and the reason that this sort of system is used, is to help advertisers determine which form of advertising is going to be best for their particular company.
The main reason that this system is used, is so that the exact price can be worked out across the different types of media. One form may be less expensive, but that will not be an asset if they are not bringing in the customers. A dozen customers brought in by a fairly expensive campaign is going to be much better than none from a cheap one. Once there is a figure of 1000 reached, it is big enough to give an accurate figure and allow a decision to be made.
The one thing that is more difficult to determine is whether or not a person who made a contact actually rejected the idea when a different type of media was viewed. The only way that an accurate figure can be arrived at is to make the calculation just based on the actual hard facts that are there. If X amount of people per 1000 made contact through media A and half the amount through media B, then as long as the media A campaign was less than half the price of the media B campaign then that will be the winner. A figure of 1000 is a well- established standard.