Cost Per Mille (CPM), or cost per 1,000 impressions, is an advertising technique where marketers pay for every 1,000 impressions an ad receives. It is often used with digital marketing in efforts to increase brand awareness. For marketers, the pros and cons of CPM advertising should be understood within the context of how it shapes advertising decisions.
Pros and Cons of CPM Advertising
Pros of CPM Advertising
CPM Advertising for Increased Brand Awareness
CPM advertising achieves the goals of marketing campaigns aimed at promoting a brand’s visibility. While brand advancement campaigns typically have little impact on sales, companies are also able to build their value through brand recognition by simply showing ads.
Predictable Costs
As previously mentioned in the characteristics of CPM, advertisers know the amount of money they will spend on advertising. This is due to the fact that they pay a set fee with regards to every thousand impressions. With this kind of pricing policy, one can budget and strategize financially before actually executing the marketing campaign.
Broad Reach
The advantages of high audience exposure enable advertisers using CPM to aim at those audiences that might not be targeted with other marketing methods. This allows companies to ensure they attain a market and realize the potential that exists coming from consumers of different age and gender.
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Disadvantages of CPM Advertising
Uncertainty of Engagement
Ad impressions are paid for by the advertisers and ensures that an ad is seen. However, whether a user engages with the ad remains entirely up to them. This lack of guarantee tends to lower rate of engagement, also termed as conversions.
Risk of Fraudulent Activities
CPM ads are susceptible to fraudulent activities such as bots that manufacture fake ad impressions. These sorts of fraud not only make the ad campaign ineffective but also waste a good amount of funds allocated for the campaign by charging for traffic that isn’t real.
Ad Weariness
Over a period of time, audiences tend to get nonchalant towards an ad due to repeated viewing. This oversaturation leads to stagnancy in tools geared towards ad advancement, rendering the ad ineffective.
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Conclusion
Advertising through CPM provides a clear method of achieving wide reach and heightened visibility for a brand. This method also has challenges such as unpredictable engagement, susceptibility to ad fraud, and potential ad fatigue. Marketers looking to drive performance while balancing other advertising goals should consider CPM’s cost-efficacy alongside these suggestions.