What is Cost per Impression?
Generally abbreviated as CPI, cost per impression is a concept in Search Engine Marketing and is quite useful to online marketers seeking to advertise on different websites. Cost per impression – as the name suggests – involves the cost borne by an Internet advertiser for every impression (or click) that a particular ad gets. These ads typically include banner ads or similar other promotional advertisements that one might come across on a typical website.
CPI is a useful tool in assessing the effectiveness of Internet advertisements, i.e. by measuring the number of times an ad is clicked by website visitors. CPI could be for each individual impression, or for every 1,000 impressions an ad gets – which is more widely adopted by marketers for convenience purposes. In case of latter, the term is usually known as “Cost per Thousand Impressions” or CPM.
How Does it Work?
Now how does CPI work? Basically, the concept of CPI is based on projected viewership or readership of ads. An Internet marketer, when placing an advertisement on any website, is required to pay a certain fixed amount to the publisher for every click that particular ad receives from Internet users and website visitors. For the sake of convenience, marketers have come up with a benchmark of 1,000 impressions to measure the cost, because the amount for each individual impression is usually quite minimal to take into account.
Cost per impression can be used to compare different forms of media with Internet advertising in order to determine their relative attractiveness and effectiveness. For example, the media vehicle that results in the lowest cost per impression is usually the most optimal, because it would be incurring the least cost to reach 1,000 members of the audience as opposed to other means of advertising.
Cost per Impression Calculator
A single website may contain a number of different ads, thus viewership is usually measured in terms of how many clicks an individual ad receives, as opposed to the number of overall page views. To minimize the possibility of fraud and ‘unwarranted’ clicks, ad servers may refuse to acknowledge certain actions from being counted as impressions, such as refreshing a page or other similar user actions to help ensure accuracy in counting.
There are numerous CPI calculators on the Internet that are quite simple and straightforward to use. These calculators can help you determine the cost of your marketing campaign based on every 1,000 impressions, as well as find out the number of exposures that your budget allows for. The basic formula for measuring cost per impression is: Advertising cost (in $) / Number of impressions an ad gets.
Cost per impression is not only applicable to Internet advertising, but may also have relevance to other forms of advertising such as TV ads. Marketers, however, need to take into account aspects other than CPI/CPM to make informed decisions regarding the purchase of media, because a cheaper alternative can prove to be ineffective and a total waste if it fails to reach its target audience.