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