WHY A LOW CPM PRICE MAY NOT BE BEST FOR YOUR BRAND
In this executive read, we’ll quickly understand why planners and marketers should look beyond the CPM price to truly understand the cost effectiveness of different ad networks/ publishers/ platforms.
A common mistake in the digital marketing industry is to think the number of impressions served, equals the number of times an ad has been viewed. This also has a huge bearing on pricing and cost-effectiveness as you will learn below.
WHAT IS CPM?
CPM stands for cost per thousand impressions and is typically used in measuring how many thousands of people have been served your ad (impressions). The abbreviation has French Latin origins, where ‘mille’ means thousand.
In short CPM is a media term used to denote the price of 1,000 ad impressions.
WHAT IS AN AD IMPRESSION?
Each time an ad is shown to a user, it is counted as an impression.
ARE ALL IMPRESSIONS THE SAME?
No, not all impressions are created equal. There is a difference between a ‘served’ impression and a ‘viewed’ impression.
When a digital ad is served, form its host server, it is referred to as a ‘served impression’.
When this impression is also actually seen by a real person it is referred to as a ‘viewed impression’
WHY ALL SERVED IMPRESSIONS MAY NOT BE VIEWED?
- The ad is served, but it is placed so far down that the user leaves the site after just a few scrolls, not giving the ad to be viewed
- The add did not fully render due to various reasons e.g. loading issues, bandwidth issues
SO, HOW DOES THIS IMPACT THE EFFECTIVE PRICE?
For instance, a CPM of $10 will result in an effective cost per impression of 1 cent.
But if the Viewability rate is only 20%, the effective cost will go up by 5-times resulting in an actual cost per impression of 5 cents.
|CPM||IMPRESSIONS||COST PER IMPRESSION|
(20% Viewability Rate)
(5X more expensive)
Hence it is important for planners and marketers to look beyond a CPM price and understand Viewability rates offered by different ad networks/ publishers/ platforms, including the large ones.