Buying and commercials
What is CPM in advertising?
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what it means here
Here is what the term means for a UK buyer
The definition above holds anywhere. Buying media in the UK adds the detail below, including where AdBuyMCP does something different.
A CPM in a plan is a forecast of what auctioned inventory will clear at, because most of it is priced impression by impression. Averaging two days of averages produces a number that describes neither day, so AdBuyMCP's delivery reports keep ratios and cost averages as dated observations and never sum them. Audience data can add its own cost on top of the media, and a quote should say whether it includes the audience.
How is CPM calculated?
Divide the cost by the impressions delivered, then multiply by a thousand. For example, a £1,500 line that delivers 75,000 impressions has a CPM of £20. Television, streaming, audio, out-of-home and cinema are quoted this way, while paid search and much of paid social are bought per click.
A CPM says nothing about whether anyone saw the advert. Viewability, brand safety and fraud checks need a verification vendor, and AdBuyMCP has none integrated yet.
What moves the CPM on a UK plan?
Three things move it: how narrow the audience is, how many buyers want the same impressions, and whether the targeting uses licensed data. A tightly targeted business audience in London clears well above a broad national one, because it competes for a thin slice of inventory.
An AdBuyMCP awareness plan is priced by the size of your market and how often it should see you, rather than per thousand impressions, and the weekly report shows what each channel delivered. Each channel's cost page sets out what the market charges, with sources and dates.
Type your company website or work email to see who we think buys from you and what reaching them 3, 5 or 12 times a week would cost.
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related terms
These terms sit next to this one
Most confusion in media buying comes from two adjacent terms being used interchangeably, so these are the neighbours worth reading next.
CPC
The cost of one click on an advert, and the standard price unit for paid search and for much of paid social, where the advertiser pays for a response rather than for the impression that produced it.
CPA
The cost of one completed action, whether that is a sale, a lead or a booking, calculated by dividing spend by the actions attributed to it. That makes it entirely dependent on the attribution model underneath.
Working media
The portion of an advertising budget that actually buys advertising, as opposed to the portion consumed by platform fees, data costs, agency fees, ad serving and production. Usually expressed as a percentage of total spend.
Real-time bidding (RTB)
The auction mechanism underneath most programmatic advertising: when an impression becomes available, buyers bid on it and the winner's advert is served, all within roughly a hundred milliseconds.
same group
These terms are also in Buying and commercials
How media is transacted and where the money goes. The terms in this group are the ones a price conversation turns on.