Cost per impression, along with cost per click and cost per order, is used to assess the cost effectiveness of Internet marketing. Each has benefits depending upon the perspective and end goal of the advertising activity. Once a certain number of web impressions is achieved, the quality and placement of the advertisement will affect click-through rates and the resulting cost per click.
Cost per impression: The cost to offer potential customers one opportunity to see an advertisement.
Cost per impression ($) = Advertising cost ($) ÷ Number of impressions (#)
Note: Cost per impression is often expressed as “cost per thousand impressions” in order to make the numbers easier to manage.
Related Metrics and Concepts
Effective cost per mille (eCPM): Also known as effective cost per thousand.
The Search Engine Marketing Professionals Organization (SEMPO) defines eCPM as ”a hybrid Cost-per-Click (CPC) auction calculated by multiplying the CPC times the click-through rate (CTR), and multiplying that by one thousand. (Represented by: (CPC x CTR) x 1000 = eCPM.)
- ^ Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; and David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance (Second Edition). Upper Saddle River, New Jersey: Pearson Education, Inc.
- ^ American Marketing Association, AMA Dictionary.
- ^ SEMPO, Glossary of Terms: eCPM.