While PPC advertising revolves around the pay-per-click model, impressions are a key metric for visual ads. These make up an increasing share of digital ads in the age of social media.
While cost-per-click (CPC) is the most talked-about metric for PPC expense, cost-per-mile (CPM) tells you how much you’re paying for every 1,000 impressions your ad receives and a growing number of networks offer CPM as a pricing model.
But what is a good CPM on the major advertising networks?
Average CPMs across major networks
The first step towards setting target CPMs is to look at the average cost per mile across your networks of choice. So, in this section, we look at the average CPMs on Google Search, the Google Display Network, Facebook Advertising, Instagram and YouTube.
- Google Search ~ £29.76 (source)
- Google Display Network ~ £1.73 (source)
- Facebook Advertising ~ £5.20 (source)
- Instagram Ads ~ £4.85 (source)
- YouTube Ads ~ £2.00 (source)
As you can see, the average CPM on Google Search is far more expensive than the other networks. However, it’s important to remember that search ads are shown to people who are actively looking to buy your products or services. Google Search Ads’ higher click-through rates and conversion rates reflect this.
For example, the average CTR for Google Search Ads is 2.88% while this drops to 0.64% for ads on the Google Display Network.
You pay more for Google Search Ads because they’re more effective at capturing purchase intent and, because of the high CTR and conversion rates, CPM isn’t an effective measure of performance of cost for Google Search Ads.
When is CPM an important metric?
CPM is an important metric on networks where people are going to see your visual ads. However, the chances of them clicking through at the first impression are low. With Google Search Ads, users are looking for something specific and Google shows ads that promise to deliver, meaning the incentive to click through is high.
When users see ads on the Display Network, they’re not searching for anything. They’re going about their business, browsing the web, with your ads shown while their mind is elsewhere.
Likewise, when people see ads on Facebook, Instagram, or YouTube, they’re not actively looking to purchase anything. They’re scrolling through their feeds or watching videos, and your ads are essentially interrupting the experience.
So, incentive and click-through rates are naturally lower on these networks.
This doesn’t make them ineffective advertising platforms. It means they’re often more suitable for capturing leads at the earlier stages of the consumer journey. These platforms are especially effective for building brand awareness where you want people to see your brand, even if they don’t click through to your site.
This is where CPM is a key metric: to measure the cost of getting your ad seen by enough people.
The Google Display Network, Facebook Advertising, Instagram Ads and YouTube are all powerful platforms for building brand awareness. What’s more, their CPMs are low enough for you to promote your business to a vast audience without breaking the bank.
Each of these platforms also provides you with targeting options to help you deliver your ads to audiences with a proven interest in your brand, products, or services. Facebook’s targeting options (also available on Instagram) are particularly powerful.
What is a “good” cost-per-impression on these networks
This is a tough question to answer. However, advertisers need to understand that it’s probably not the right one to ask. While CPM provides an estimate for how much you’re paying to get your ads in front of 1,000 eyes, it doesn’t tell you anything about who is seeing your ads or what they do after they see them.
Impressions alone achieve little in PPC. You need to get your ads seen by the right people, which is why targeting options are so important. You also need to ensure that a high enough percentage of people seeing your ads click through to your website and, ultimately, converting on your landing pages.
So, cheaper CPMs are no good to you if your ads are being shown to people who will never show an interest in what you offer, even if they do click through to your site.
A “good” CPM is the one that helps you achieve your advertising goals. This is a complex mix of getting your ads seen by as many people as possible, but people who are likely to engage and buy from your brand in the future – especially if you’re paying for ads on a CPM model.
Want to find out more?
Hot Click Marketing is specialist PPC agency in Manchester.
Call us on (0161) 870 2580 or email info@hotclickmarketing.co.uk for more information.
Or, to learn more about advanced pay-per-click topics, check out our in-depth blog.