30Sep / 2015

Understanding Cost Per Thousand (CPM) Web Pricing

Another web pricing measurement besides the Cost-Per-Click (CPC) metric is that of Cost per Thousand (CPM). With the “M” representing the roman numeral for 1,000 (mille), this metric is measured in the basis of impressions. The definition that Facebook provides for…

Cost Per Thousand (CPM) is
“The average cost you’ve paid to have 1,000 impression on your ad.”

The CPM metric is most effective to measure campaigns that seek:
– to elevate brand awareness
– or delivery a specific message

Website publishers particularly favor CPM because marketers pay based on the CPM rate regardless of actual impact or click-through-rate such as making a purchase or installing an app. This certainly makes CPM seem less favorable compared to CPC. Nonetheless, CPM is still a crucial metric for marketers as it can provide key insights and is able to measure other aspects of a campaign’s impact.

For example, Levi was one of the first
brands that utilized Instagram as a social media marketing tool to raise brand awareness. After a nine-day period campaign, Levi reached 7.4 million consumers in the 18 to 34 age range. With 155,000 followers at the time, Levi was able to reach an audience that was 47 times bigger. Using CPM as its metrics, Levi would be able to benchmark the cost for its Instagram campaign versus campaigns that run on other platforms, a feature that CPC cannot directly compare.

To calculate the amount that Levi had to pay Instagram, divide 7.4 million by 1,000 and multiple by the CPM rate.

Further Reading:
– CPM vs CPC: Which Should You Use For Facebook Ads?

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23Sep / 2015

Understanding Cost Per Click (CPC) Web Pricing

After the rise of social networks and the deviation from traditional media channels increased, marketers needed to start making changes as to how they advertise and reach their customers. An in order to quantify the impact of these new tactics, metrics needed to be set up. One of these metrics is…

Cost Per Click (CPC) which
“bills by the number of times a visitor clicks on a [particular element] instead of by the number of impressions” – Investopedia.com

CPC are most effective for campaigns that:
– work with a set budget allowance
– seek to track and maximize effectiveness

For example Google AdWords allows marketers to place ads with any budget range. Once the budget allowance is reached, the ad is removed from the google searches. Adwords only makes marketers pay for results. If there are no visits or clicks, no fee is charged. CPC ensures that the promotional budget is effectively utilized and spent by only charging for actual clicks, while also gaining some free impressions!

Facebook’s recent updates of its CPC measures on Juy the 8th highlights the benefits of track-ability. Facebook no longer mergers likes, comments, shares and others as part of its CPC measures. CPC payment will only count click on links that direct to another website, on call-to-action buttons to buy or install an app, and among others. This ensure the true impact of the campaigns click-through-rate are captured and eliminates false positive effects of mindless scroll-liking.