KPI

Average CPM

The average CPM is a crucial KPI to track. Here's all the information you need about this KPI, what it is, why it's important, how to calculate it, and way more!

TRACK YOUR AVERAGE CPM!

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What is average CPM?

The cost per thousand (CPM), also called cost per mille, is the price of 1,000 advertisement impressions on one web page. If Google Ads charges a $1.00 CPM, that means an advertiser must pay $1.00 for every 1,000 impressions of its ad. So the average CPM is the average of all your different ads CPM.

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How do you calculate the average CPM?

As the name suggest, you simply need to divide your average advertising cost by your average number of impressions, multiplied by a thousand.

Average CPM formula:

CPM = 1000 * cost / impressions.

What is a good CPM?

A good cost per mille depends on multiple factors, such as the type of ad networks you use (Google ads, display ads, search ads, Facebook ads, etc) Google search ads average CPM is $38.40, while the google display network ads have an average CPM of $3.12. So it really depends on your digital advertising budget, industry benchmark, campaign objectives, CTR (click-through rate) and if you value the brand awareness of ad impressions.

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What is a bad CPM?

You don’t want to spend too much on ad impressions. Ad views are great, but if they don’t come with ad revenue from your target audience, it doesn’t have much value. A good way to determine if you pay too much is to check the industry benchmark for the online ads you’re doing. If you pay more than that, it might mean a bad CPM. However, you have to keep in mind that a lower CPM is not always a good thing, as it may indicate poor quality traffic. So make sure to track this along with your cost per click (CPC), click through rate (CTR) and return on investment (ROI).

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Average CPM KPI examples & templates

Reports give you a good view of all your online marketing strategy metrics and overall online performance. You average CPM can be added to a few KPI templates :

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Social media advertising template Social media advertising template

This template is filled with metrics for all your social media online advertising, from LinkedIn ad placements, Facebook advertising costs, demographics metrics, YouTube video ads, average CPC and more.

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PPC report template PPC report template

Get the best out of your ad campaign. From social media to AdWords and Google Ads, measure your ad results with this awesome digital marketing report which helps you track important metrics and optimize your efforts.

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Ecommerce report template Ecommerce report template

A report with all the most important metrics for your eCommerce business site. Measure your conversion rate, the average cost of acquisition, the total number of sales, cost per click, ads cost, ad spend, revenue, all from your marketing channels.

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Average CPM best practices

In order to improve your CPM, here are some of the best tips you should keep in mind.

Average CPM best practices

step 1 icon Target the right audience

Your ad campaigns have to be targeted to a specific audience if you want them to work. CPM rates for very popular or large audiences are usually very pricey, so make sure to start by tackling a more niche audience, and then going up from there instead of the other way around. Particularly if you are a small business or have smaller budget.

step 2 icon Track it alongside other metrics

Tracking your CPM is good to have an idea of how much you are paying for your ads, but it’s not the only metric you should track. Your average cost, ad spend, conversion rate, and return on investment will help you have a better overview of which ads are performing better than others. Use a tool like Dashthis to create a monthly report to track those important metrics.

step 3 icon Optimize your ad copy

You may have a lot of impressions, but you need those impressions to convert into clicks, and then paying customers, so make sure you have the most creative, enticing ad copy, so that your target audience will want to click. and that the algorithm will want to show your ad as much as possible. Just like for search engine optimization, you want to improve for the audience just as much as for google’s algorithm.

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CPM Synonyms

Although CPM is widely used, there are multiple synonyms that can be used. Here are a few :

Cost per mille, cost per thousand (CPT), average CPM.

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