Cost per Thousand Impressions – CPM

So you have seen the CPM initials around, and can’t put the words to the letters.  Well, CPM stands for Cost per Thousand Impressions (yes I know neither Thousand nor Impressions start with M).  It is a way to pay for advertising.  Basically the number of impressions a specific ad gets is then used to calculate how much the advertiser will pay. 

Since usable Ad space on a page is finite, the larger the traffic number and views on a site, the more that owner can charge for his/her advertising space.  What are some averages?  Well, from reading Seth Godin’s blog a couple days ago, he mentions that “Ads online typically cost between $5 – $20 for 1,000 impressions“. 

So, one way to make money online is to create a great blog that gets lots of traffic.  Creating a lot of great posts and interacting with your readers and marketing well could get you to the point of being able to sell some advertising.  Many sites do this.  Take a look at the WSJ, NYT, etc.  and you will see advertisements.  The large audiences they draw are probably allowing them to charge more than the $20, but they are also unique. 

How much money does this equate to? How many impressions do you need to make some serious money?

Let’s take the $5 per 1,000 scenario:

10,000 impressions per month could equate to about 1,000 users (each visiting 10 pages a month).

10,000 impressions @ $5/1,000 = $50,000/1,000 = $50.

Now, keep in mind you have more than 1 ad space.  Let’s pretend you have 5 useable / saleable ad spaces.  That would give you $250 / month from your advertising.  How do you make more? 

1.  Bring those 1,000 users back more frequently with more frequent interesting posts. 
2.  Increase your readership through some advertising / marketing of your own.
3.  The more targeted your audience, the higher the CPM can be.  If your site has a very specific purpose then you can get more from advertisers interested in reaching that audience.  But you have also limited your advertiser base.  It is a give and take.

So, to make let’s say $2,500 per month, you would need to add a zero to the views or viewers.  That means.  10,000 users @ 10 views/month giving you 100,000 impressions.  100,000 * $5 = $500,000/1,000 = $500 * 5 advertisements = $2,500.  Conversely, you could use the same 1,000 viewers and try and get them to come to the site 100 times a month instead of 10. 

That would probably mean 5 posts a day.  Why 5 and not 3?  Because some of those readers are not going to be able to visit and read each post everyday.  By doing 5, the more active viewers make up for the less active ones.

Does this seem out of reach to you?  Is this something that you can do?  With any luck you were able to create your brand and reach some of these viewer numbers over the last couple months.

Chuck
Click Into Action
Helping you learn how to make money online.
Follow me on Twitter – @JohnnyOptimist