Glossaries
CPM
What is CPM in Growth Hacking?
CPM (Cost Per Mille) is a pricing model in digital advertising where advertisers pay for every 1,000 impressions their ad receives. In growth hacking, it's a key metric used to measure and optimize the cost-effectiveness of advertising campaigns.
Synonyms: Cost Per Thousand, Cost Per 1000 Impressions, Thousand Impression Cost, Mille Rate
Why CPM is Important in Growth Hacking
CPM is crucial in growth hacking because it allows marketers to understand the cost-efficiency of their advertising efforts. By tracking CPM, growth hackers can optimize their ad spend, reach a wider audience, and ultimately drive more conversions at a lower cost.
How CPM is Used in Growth Hacking Strategies
Growth hackers use CPM to:
- Compare advertising costs across different platforms
- Determine the most cost-effective channels for reaching target audiences
- Optimize ad creatives and targeting to lower overall CPM
- Calculate potential reach based on available budget
Examples of CPM in Action
- Social Media Advertising: A growth hacker runs Facebook ads with a $10 CPM, reaching 100,000 users for $1,000.
- Display Network: Google Display Network campaign achieves a $5 CPM, allowing the advertiser to reach 200,000 users for $1,000.
- Influencer Marketing: An Instagram influencer charges $500 for a post reaching 50,000 followers, resulting in a $10 CPM.
Frequently Asked Questions
- What's a good CPM rate?: A good CPM rate varies by industry and platform, but generally, $1-$2 is excellent, $5-$10 is average, and over $20 might be considered high.
- How do I lower my CPM?: Improve ad relevance, refine targeting, test different ad formats, and optimize for engagement to lower your CPM.
- Is a lower CPM always better?: Not necessarily. A lower CPM is desirable, but it should be balanced with the quality of impressions and their likelihood to convert.
- How does CPM relate to other metrics like CPC or CPA?: CPM focuses on impressions, while CPC (Cost Per Click) and CPA (Cost Per Acquisition) measure more direct user actions. All are important for a comprehensive growth hacking strategy.