CPM What is it and why does it matter

What is CPM and why does it matter?

WHAT IT IS:

Cost per thousand (CPM) is a marketing term referring to the cost of a media vehicle reaching 1,000 members of an audience. The M in CPM is the Roman numeral for 1,000.

HOW IT WORKS (EXAMPLE):

The formula for cost per thousand (CPM) is:

CPM = (Cost of 1 Unit of a Media Program) / (Size of Media Program’s Audience) x 1,000

A media program unit can be one print ad, one commercial, or one of any sort of advertising medium. The media audience may include households, readers, users, or members of a demographic category.

Let’s assume Business ABC is considering purchasing a one-page print advertisement from a few different print publications in their area. Publication X offers a $500 full page, full color ad that will reach 20,000 readers. Publication Z offers a full page, full color ad for $1,500 that is expected to reach 74,000 readers. Using the formula above, we can calculate which of these publications is the better value:

Publication X = ($500) / (20,000) x 1,000 = $25 CPM

Publication Z = ($1,500) / (74,000) x 1,000 = $20.27 CPM

So as you can see even though the initial cost of the ad is higher for Publication Z the CPM is over $4 less.

WHY DOES THIS MATTER:

Cost per thousand (CPM) is important because it is used to compare the cost effectiveness of different media vehicles. The vehicle with the lowest CPM is generally the most efficient because it requires less money to reach 1,000 audience members.

It is important to understand that marketers do not rely solely on CPM when making media purchase decisions. Cheap advertising that does not effectively reach a target audience can be a waste of money. For this reason, the effectiveness and suitability of media programs and outlets can also influence purchase decisions of someone looking to advertise.

WHAT WE OFFER:

At SFSN Media we offer a variety of options to reach a wide array of audiences at various CPM rates. Whether it’s reaching 73,918 homes through the weekly distribution of the Shopping News, nearly 100,000 homes and residences in the area with Deals Direct or the wide variety of online marketing solutions that we provide. SFSN Media has just what you need to reach your audience at the price point that meets your budget. Contact us today to see how we can help you.