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what are cpm ads

Published on: August 4 2023 by pipiads

Today, I'm going to answer the question, What is CPM? In fact, understanding CPM is like having a genie that will grant your number one wish. No, not the wish where Chick-fil-A is open on Sunday, but the other wish where you can reach your target audience at a very low cost. This understanding has allowed us to properly budget and successfully optimize ad campaigns for the $50 million in Aspen we manage every year for small businesses.

Now, this isn't going to be an average definition of the marketing term. I'm going to add some substance to this conversation by discussing why CPM is important, what is CPM marketing, what CPMs you can expect as you navigate various ad platforms and ad types, and how to get rock bottom CPMs to help you reach more people for less money. Don't worry if you're a beginner just trying to understand what is CPM advertising, this video will make it extremely easy to understand. If you're an advertising expert, keep watching. You're guaranteed to have more than one aha moment, and it doesn't hurt to brush up on those skills. So if you're looking for a well-rounded definition of CPM, stick with me until the end of the video.

Hi, I'm Caron from Life Marketing, an award-winning agency to help small businesses grow online. So there's a portion of those watching this very video that truly don't mind throwing their advertising dollars into a fire. And for everyone else, CPM is important because it reflects your cost to reach your audience. If you have an idea of your expected CPM before you start advertising, you can properly budget for success. If your CPM is higher than your competitors, you're paying more than they are to reach the same audience. In a way, CPM is similar to gas prices. When gas prices are low, you go further for less money. And when they're high, you have to spend a little bit more to reach the same destination.

Unfortunately, there isn't much you or I can do to influence the price of gas. But luckily for us, we can make small changes to help us reduce our CPM. But while you're here, make sure to like this video so others can get their questions answered as well, and subscribe for me to learn more marketing definitions and strategies that help start, optimize, and scale your way to more traffic and more sales.

Alright, so what is CPM? CPM, also known as cost per mille or mild to some, is the cost advertisers pay to reach every 1,000 impressions. An impression occurs every time someone views your ad. You can calculate your CPM by taking the total amount spent on an ad campaign, dividing it by impressions, and then multiplying it by a thousand. I know that was a lot, so here's an example: if you spent $50 and got 10,000 impressions, your CPM is $5.

Now let's go over what CPMs to expect. Remember when I said CPMs are similar to gas prices? Just like gas prices are different from region to region or even station to station, CPMs differ depending on the advertising platform and even the ad type. So we did the research for you and took a look at the average CPMs on the most popular advertising platforms today: Facebook and Google.

Let's take a look at Facebook first:

- Facebook News Feed: $7.77

- Facebook's right-hand placement: $2.28

- Facebook's Marketplace: $3.39

- Facebook's Audience Network: $7.84

- Facebook Messenger: $7.15

As you can see, even on Facebook, different placements will give you different CPM costs, with Facebook's right-hand placement being the cheapest. Now let's take a look at the average CPMs on Google Ads (formerly Google AdWords):

- Google Search Ads: $38.40

- Google Display Ads: $2.40

What we notice right out of the gate is that the medium CPM for Google Search Ads is about five times higher than the most expensive average CPM on Facebook. Now, is that a bad thing? Before I answer that, leave a comment below and let me know your answer or your thoughts.

Okay, so here's what I think. There are instances where your CPM can be higher on Google, but Google actually turns out to be more profitable for you. The key is to test different platforms and placements to discover the best performer. The one thing these averages do help us understand is the budget needed to properly test for platforms or audiences where the CPM is high. You may need a larger budget to measure that performance.

Outside of budgeting, tracking, and analyzing your CPMs, would allow you to gauge the cost-effectiveness of an ad campaign. Alright, now let's talk about how to get rock-bottom CPMs. If you want to reach your target audience for the lowest price possible, you must first understand what factors can determine your CPM.

Here are the most common CPM factors:

1. Target audience: Who you target

2. Schedule of dates for the campaign: For example, running ads on holidays may cost you more

3. Placement: Where those ads appear

4. Frequency: The number of times your ad shows to the same audience

5. Ad type: The type of ad that you run

6. Ad quality and relevance: How well your ads are engaging the audience

7. Market demand: The demand for your target audience

8. Market supply: How available and responsive your target audience is

Now that you know the factors, how do you achieve rock-bottom CPMs? The number one, hands-down thing you can do to lower your CPM is to create ads that your audience can't help but engage with. I know that was super simple, but it's true. Ads that perform poorly in terms of engagement and sentiment on Facebook and Google get punished with higher than average costs.

Okay, how can you create ads and serve ads that your audience loves? The first step is to target the right audience. I suggest split testing multiple audiences to find the ones that are most effective for you. The second step is to watch our video on click-through rate. In that video, we give away the most effective tips and tricks to increase your CTR, aka engagement. I'll link it in the description for you. The quick version of that video is to test multiple ad creatives and ad types to see which one prevails as the most relevant to your target audience.

The second best thing you can do to lower your CPM is to watch the frequency of your ads. Remember, frequency measures how many times the same people see your ad. Ideally, you're excluding those who convert from seeing your ad, leaving only those who have not converted yet to continue to see that ad. Thus, a high frequency is a sign of an ad that is not relevant, which is not a good thing and will result in higher costs for you. As a rule of thumb, keep your frequency below 3 and be sure to change your ads or audience once your frequency begins to get too high.

In summary, CPM, also known as cost per mille or mild to some, is the cost advertisers pay to reach every 1,000 impressions. It's worthwhile to consider your CPM before you advertise to properly budget to reach your target audience. And once again, once you're running those ads, to gauge the cost-effectiveness of an ad campaign.

Go ahead, comment below if you're surprised by the average CPMs on Google and Facebook, or if it differs from the CPMs you're noticing on your own ad campaigns. Also, if you haven't already, like this video to help others just like you find and benefit from it, and subscribe so you don't miss another video to help your business grow. I'm Caron from Life Marketing, until next time.

YouTube Monetization Explained: Why Others Get Paid MORE Than You!

So you have 1,000 subscribers and you have 4,000 hours watched. You've applied for and been accepted into the YouTube Partner Program. All you want to do now is turn on monetization and start earning some sweet, sweet cash. But of course, that just leads to the next obvious question: how much am I going to earn from my YouTube videos?

Well, let's break it down. The term CPM stands for Cost Per Mille, which shows you the dollars you earn per 1,000 views. You can find this data on the analytics page of the YouTube Studio for your channel or individual videos. However, it's not as simple as it seems.

First, you need to understand revenue share. YouTube takes a cut of the advertising revenue, which is typically a 45-55 split. This means that for every dollar you earn in ad revenue, you keep 55 cents while YouTube takes 45 cents. So, your real CPM would be lower than what you see in YouTube Analytics.

Next, you have to consider estimated playbacks. Not every view will have ads placed against them. In fact, only a portion of your total views will be monetized. So, you can't just assume you'll earn a certain amount for every thousand views. It's more like ten dollars for every 1,317 views, and that doesn't even include YouTube's ad revenue share.

Now, let's talk about the types of ads. Video ads typically have a higher CPM compared to display or bumper ads. So, the more video ads you have, the higher your CPM will be. However, you need to be careful not to overwhelm your audience with too many ads, as it can create a barrier between your content and your viewers.

There are also exceptions to monetization. Content made for kids, due to YouTube's restrictions, may have lower CPMS because advertisers can't target their ads as much. On the other hand, if you self-certify your content and it contains certain elements that advertisers don't want to associate with, you may also receive lower CPMS.

Geographic location and demographics play a role in CPM as well. Different countries and age groups have varying levels of disposable income, which affects the value of ads and, therefore, the CPM. Additionally, seasonality and niche also impact CPM. Tech channels, for example, tend to have higher CPMS during the holiday season.

But here's the thing: ad revenue and CPM should not be your sole focus. To build a sustainable business on YouTube, you need to diversify your income streams. Ad revenue is just a small part of the picture. There are many other sources of income that can bring in more money and give you more control over your earnings.

So, while CPM is important to understand, it's not the be-all and end-all of YouTube earnings. Focus on building a loyal audience, creating valuable content, and exploring other revenue streams. That way, you can truly turn your YouTube channel into a successful business.

5 Tactics to Lower Your Facebook CPM

Your Facebook ad CPM is a key factor in determining the cost of your ads. CPM stands for cost per thousand impressions, meaning how much you pay for every thousand times your ad is shown on Facebook. Lowering your CPM can result in lower costs per result, such as cost per lead or cost per purchase. In this article, I will show you how to lower your CPM by using different creative types and ensuring your ads can run on all placements. I will also discuss the importance of targeting larger audiences, particularly when retargeting cold audiences. Additionally, creating better ads that receive positive feedback and engagement can help lower your CPM. It is also beneficial to not limit the placements for your ads and consider the timing of your ad campaigns. Understanding how different events and seasons can affect CPMs can help you optimize your ad costs. Finally, I will provide tips on targeting audiences effectively to achieve better results with your Facebook ads.

What Is CPC , CPI , CPM Ad Network | CPC Vs CPI Vs CPM | Admob | Unity Ads | Facebook Ads

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WHY Does Facebook CPM AFFECT Our Facebook Ad RESULTS?

Hey there, Facebook ads people! I'm Konstantinos and today we're diving into the world of CPMs. How do they impact our ads? Let's find out!

- CPMs, or cost per 1000 impressions, are essential in understanding the cost of running ads on Facebook.

- Unlike Google, which focuses on cost per click, Facebook works with impressions.

- Monitoring CPMs allows us to gauge the affordability of our current ads and marketing costs.

Factors influencing CPMs:

- CPMs vary from country to country, with some being cheaper and others more expensive.

- The level of competition in a specific country, interest, or niche determines the CPMs.

- The number of people targeting a certain audience within a given timeframe impacts the CPMs.

Rising CPMs:

- CPMs have consistently increased over the years, even with fewer advertisers due to iOS changes.

- Higher competition and difficulty in achieving sales contribute to the rise in CPMs.

- People's nostalgia for lower CPMs in previous years fuels complaints about Facebook's effectiveness.

Understanding Advertising Costs:

- CPMs serve as a benchmark for determining the sustainability of an advertising account.

- If your numbers don't add up, it means Facebook advertising may not be viable for your business.

- Average CPMs remain relatively stable, unless a significant number of advertisers stop using Facebook.

Taking Control of CPMs:

- It's crucial to adapt and make your business competitive in the face of rising marketing costs.

- Lowering CPMs magically is not feasible; instead, focus on creating good, decent ads.

- Test strategies, monitor CPMs, and adapt your numbers to make your business work within the given CPM range.

Additional Remarks on CPMs:

- Established companies with highly trained pixels and multiple marketing platforms may experience lower CPMs.

- The average CPMs mentioned are for beginners or those struggling to find success on the platform.

- There are exceptions with lower CPMs or higher CPMs for successful or struggling accounts, respectively.

- Understanding CPMs is crucial for assessing the viability and profitability of Facebook advertising.

- Monitoring CPMs helps identify periods of better or worse performance and adapt accordingly.

- While some accounts may have lower or higher CPMs, the average range is applicable to most beginners and struggling advertisers.

- Keep learning and exploring Facebook ads to make the most out of your marketing efforts.

Remember, be creative, be consistent, and don't forget to subscribe!


Okay, so now let's dive into a more advanced strategy: AA CPM or CPM. What do these terms mean and how can you leverage them? In which situations should you optimize for CPM or bid on a CPM? Let's explore both of these options.

To put this in context, let's compare it to running Google Ads. When you run ads on Google, you have three options: search, display, and retargeting. Search targets people actively considering a purchase, while display is more about creating demand and reaching a larger audience.

Facebook works similarly to Google in terms of targeting, but with a few key differences. Facebook automatically switches between display and search, and you can also manually select which option to use. This is where AA CPM and CPM come into play.

AA CPM stands for optimize cost per Mille or optimize cost per thousand impressions. It means that Facebook is optimizing for a specific action, such as link clicks, conversions, video views, or app installs. Facebook uses its vast amount of data to optimize your campaign for the desired action.

On the other hand, CPM stands for cost per thousand impressions. This is more of a blanket marketing strategy, where you're bidding on reach and impressions rather than a specific action. It's popular for big brands and can be a good option if your CPM is increasing or your ads are stalling.

To determine which option to use, look at the campaign objectives in your ad account. Consideration and conversion stages should use AA CPM, while the awareness stage should use CPM. You can set your CPM or AA CPM rate at the ad set level when creating a campaign.

When launching a new campaign, it's best to optimize for the desired action. However, there are instances where you may need to switch. For example, if your ads have a low click-through rate and conversion rate, switching from AA CPM to CPM can prevent your campaigns from stalling or costing you too much money.

It's important to review your funnel, landing pages, targeting, and creatives if you have a low click-through rate and conversion rate. If you have a good click-through rate but low conversion rate, consider switching to link clicks. This option still optimizes for an action but focuses on driving more clicks to your landing page.

If your ads have a good click-through rate and conversion rate, stick with AA CPM to optimize for that action.

In the next training video, we'll discuss best practices for optimizing your campaigns and the importance of tracking actions or event triggers. This will help you understand the auction process and make informed decisions.

Lesson 1.0: Understanding CPC and CPM

Welcome to Unit 1: Understanding CPC and CPM! The world of online advertising is filled with acronyms like CPC, CPM, RPM, and more. These acronyms represent important metrics, but it can be confusing to know where to start when it comes to increasing these values and ultimately increasing your revenue. Additionally, many of these acronyms can have different meanings depending on the context and usage, adding to the confusion. In this article, we'll walk through the most important acronyms, starting with CPM.

CPM stands for cost per 1000 impressions. From the advertiser's perspective, CPM refers to the price they are willing to pay to serve one thousand impressions of their ad. For example, if an advertiser bids a CPM of two dollars, it means they are willing to pay two dollars for every thousand times the ad appears to a user. It's important to note that there are no CPM values in your AdSense reporting. Instead, we use the acronym RPM, which stands for revenue per 1000 impressions. This term is unique to AdSense and represents your effective revenue per 1000 impressions, regardless of the bid type. RPM is calculated by combining and averaging all impressions served on your site.

Moving on to CPC, which stands for cost per click. CPC is the price an advertiser pays each time a user clicks on an ad. In your reporting, CPC metrics show the revenue you receive for each click on an ad on your site.

There are also two new bid types that will become increasingly popular in the future. The first is CPE, which stands for cost per engagement. With engagement ads, advertisers only pay when a user interacts with the ad in a specific way beyond just clicking on it. These ads are usually video or rich media ads.

The other new bidding metric is active view CPM. With active view CPM bidding, advertisers bid on one thousand viewable impressions and only pay for impressions that are measured as viewable. An ad is considered viewable when at least 50 percent of it is displayed on the screen for at least one second.

As these new bidding types become more common, we will provide more information on them, including in your AdSense reporting. In this unit, we'll focus on the changes you can make to your ad setup to attract higher-paying ads from advertisers. We'll cover the various settings for your ads and your AdSense account that could directly impact your ad unit's CPM and CPC.

In conclusion, understanding CPC and CPM is crucial in the world of online advertising. By optimizing your ad setup and understanding the different metrics, you can increase your revenue and attract higher-paying ads. Stay tuned for more information on the new bidding types and their impact on your AdSense reporting.

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