Tuesday, November 6, 2007

Cost per impression

Cost Per Impression is a phrase often used in online advertising and marketing related to web traffic.

It is used for measuring the worth and cost of a specific e-marketing campaign. This technique is

applied with web banners, text links, e-mail spam, and opt-in e-mail advertising, although opt-in e-mail

advertising is more commonly charged on a Cost Per Action (CPA) basis.

The Cost Per Impression is often abbreviated to CPI

This type of advertising arrangement closely resembles Television and Print Advertising Methods for

speculating the cost of an Advertisement. Often, industry agreed approximates are used. With Television

the Nielsen Ratings are used and Print is based on the circulation a publication has.

For Online Advertising, the numbers of views can be a lot more precise. When a user requests a Web Page,

the originating server creates a log entry. Also, a third party tracker can be placed in the web page to

verify how many accesses that page had.

There are other advertising pricing structures. CPC - Cost Per Click Through, CPL - Cost Per Lead (lead

usually meaning a free registration), CPS - Cost Per Sale. These structures are collectively referred to

as CPA - Cost per Action.

CPI and/or Flat rate advertising deals are sometimes preferred by the Publisher/Webmaster because they

will receive a more consistent fee proportional to the amount of traffic.

Today, it is very common for large publishers to charge for most of their advertising inventory on a CPM

or Cost Per Time (CPT) basis.

A related term, eCPM or effective Cost Per Mille, is used to measure the effectiveness of advertising

inventory sold (by the publisher) via a CPC, CPA, or CPT basis.

Cost Per Mille

The acronym CPM comes from the print world (and the Latin word mille), and stands for Cost Per Mille in

the US or Cost Per M in the UK, with M representing the Roman numeral for thousand. When online

advertising started gaining momentum, those in the industry used this term (rather than something like

CPI) as a metric for describing the Cost Per Impression largely because advertisers were already

familiar with the term CPM.

It is important to remember that when someone says something like, "our CPM is $5," this means that the

Cost Per Impression is $0.005

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