CPM, or cost per thousand impression, is a method of calculating how much it costs to display your ads on an advertising network and how much money you can make if you are the publisher that displays those ads on your website. So how do you efficiently calculate CPM and find out how much you can make by offering advertising on your web site? Follow the steps below to understand this analysis and start benefiting today from CPM advertising.
Instructions
1. Determine the number of page views (not visitors) that your website attracts for a 30-day period, or a specific month, using an online analysis service such as Google analytics or your own website logs. This is important because the CPM rates are based on the number of page views sites attract as well as popular keywords attributed to the site and quality of relevant content.
2. Determine a schedule of rates to charge advertisers to utilize space on your site to advertise their services or products. Assume, for example, you would like to charge $10 a month ($120 annually) for a specific size advertising section on the main page of your website. You then calculate CPM by first dividing $10 by the number of page views your site receives in a 30-day period. Assume your site attracts 2,500 visits per month: 10 / 2500 = 0.004. That means you will have to find an advertiser that is willing to pay $0.004 per page view. Advertisers understand their costs in terms of CPM, or cost per thousand impressions, so you must multiply 0.004 by 1,000 to get a CPM rate of $4.00.
3. Research average CPM rates for advertisers that have services and products related to the topics and content on your site. You may research CPM rates on Google AdSense and Google AdWords, as well as Yahoo! and Bing advertising services. You may market your own advertising rates by CPM to see if you can attract potential advertisers. Finding the sweet spot is key. By matching or slightly undercutting CPM offered by the largest web advertisers, you should be able to attract quality advertisers and recurring monthly income from advertisements.
