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What is CPM online (Impressions) planning? (28.07.2014)

You have probably heard the term CPM a number of times. It is an abbreviation of Cost Per Mille – “mille” is a Latin word, meaning “thousand”. In direct translation CPM means “Cost Per Thousand”. In order to give a quick answer to the question “Cost Per Thousand What?” – we are talking about Impressions.

Impressions are an important metric in the online planning and they represent the number of times a website / webpage has been displayed to users, regardless of the number of unique users to which the page has been displayed to. In other words – the website / webpage can be displayed 10 times to 1 user, also the website / webpage can be displayed 1 time to 10 different users – in both cases we are counting 10 Impressions.

Basically CPM is a pricing model. At present this is the most common pricing model - all Bulgarian websites sell their advertising positions based on it. Every websites announce a price (different price for every format) for 1 000 Impressions of a certain webpage or any page on the website.

CPM budget calculation formula

Example: We would like to buy 400 000 Impressions on home page of www.abv.bg, regular banner 300 x 250 – the price for 1 000 Impressions (CPM) for this position and for this banner format is 5 BGN. The budget for 400 000 Impressions would be 2 000 BGN.

Calculation explained:

400 000 Impressions x 5 BGN /  1 000 = 2 000 BGN

The most common advertising formats being sold on CPM base by Bulgarian websites are standard and non-standard banners, and wallpapers. The format 300 x 250 is the most popular regular banner format on the market.

There are some other major parameters that have to be considered when planning CPM campaigns, as Rotation, Clicks and CTR%.