Pay Per Impression
Cost per impression, often abbreviated to CPI, is a phrase often used in online advertising and marketing related to web traffic. It is used for measuring the worth and cost of a specific e-marketing campaign. This technique is applied with web banners, text links, e-mail spam, and opt-in e-mail advertising, although opt-in e-mail advertising is more commonly charged on a cost per action (CPA) basis.
An online advertisement impression is a single appearance of an advertisement on a web page. Each time an advertisement loads onto a users screen, the ad server may count that loading as one impression. However, the ad server may be programmed to exclude from the count certain non qualifying activity such as a reload, internal user actions, and other events that the advertiser and ad serving company agreed to not count. For online advertising, the numbers of views can be a lot more precise. When a user requests a web page, the originating server creates a log entry. Also, a third party tracker can be placed in the web page to verify how many accesses that page had. There are other advertising pricing structures, which are generally referred to as Cost Per Action (CPA) :
- CPC - Cost per click Through
- CPL - Cost per lead (lead usually meaning a free registration)
- CPS - Cost per sale
CPI and/or Flat rate advertising deals are sometimes preferred by the publisher/webmaster because they will receive a more consistent fee proportional to the amount of traffic.
Today, it is very common for large publishers to charge for most of their advertising inventory on a CPM or CPT basis. A related term, effective cost per mille (CPM), is used to measure the effectiveness of advertising inventory sold (by the publisher) via a CPC, CPA, or CPT basis.
This type of advertising arrangement closely resembles television and print advertising methods for speculating the cost of an advertisement. Often, industry agreed approximates are used. With television, the Nielsen Ratings are used; print is based on the circulation a publication has.
CPM is frequently used in advertising to represent cost per thousand (where M is the roman numeral of 1000). When used in advertising it relates to the cost per thousand page impressions.
It is important to remember that when someone says something like, "our CPM is $5," this means that the cost per impression is $0.005
The Social Network Advertising Market
eMarketer predicts that $2 Billion will be spent this year (2008) on social network advertising worldwide and that this market will continue to grow - reaching $3.8 billion in spending by 2011. However, a large portion of this spending is predicted to be coming from the US market. As Internet usage continues to grow in other parts of the world, and social networks continue to proliferate, advertising dollars on social networking sites outside of the US will begin to play a major role.
There have been many claims that Social Network Advertising will revolutionize the online advertising market. Most famously, founder of facebook Mark Zuckerberg, announced that "For the last hundred years media has been pushed out to people, but now marketers are going to be a part of the conversation." There is no doubt that social network advertising is a significant new way of reaching customers, however the market is far from being mature.
"In general, it's been improving but we still have a long way to go. Things have been going well this year...it's hard to predict where social networking will come out." - Sergey Brin (Google Co-Founder)