CPI vs. CPM

Attribute	CPI	CPM
Definition	Cost Per Install	Cost Per Thousand Impressions
Measurement	Cost per app install	Cost per 1,000 ad impressions
Usage	Commonly used in mobile app marketing	Commonly used in online advertising
Calculation	Total cost of campaign / Number of installs	Total cost of campaign / Number of impressions * 1,000
Objective	Focuses on acquiring new users for an app	Focuses on reaching a large audience

Cost Per Impression (CPM)

Cost Per Impression (CPM) is a common metric used in online advertising to measure the cost of one thousand impressions of an advertisement. CPM is calculated by dividing the total cost of the ad campaign by the number of impressions, then multiplying by 1000. This metric is often used in display advertising where the goal is to increase brand awareness and reach a large audience.

One of the key attributes of CPM is that it allows advertisers to reach a large number of people for a relatively low cost. Advertisers can pay a fixed rate for a certain number of impressions, regardless of how many clicks or conversions the ad generates. This makes CPM a popular choice for brand awareness campaigns where the main goal is to get the ad in front of as many people as possible.

Another attribute of CPM is that it is a predictable and stable pricing model. Advertisers know exactly how much they will pay for a certain number of impressions, making it easier to budget and plan their advertising campaigns. This predictability can be especially beneficial for advertisers with limited budgets who need to maximize their reach without overspending.

However, one potential downside of CPM is that it does not guarantee any specific results in terms of clicks or conversions. Advertisers may pay for a certain number of impressions, but there is no guarantee that those impressions will lead to any meaningful engagement with the ad. This lack of performance-based pricing can make it difficult to measure the effectiveness of a CPM campaign.

In addition, CPM may not be the most cost-effective option for advertisers looking to drive specific actions, such as clicks or conversions. Since advertisers pay for impressions rather than actual results, they may end up spending money on people who are not interested in their product or service. This can result in wasted ad spend and lower return on investment for the advertiser.

Cost Per Click (CPC)

Cost Per Click (CPC) is another common pricing model used in online advertising, where advertisers pay a certain amount each time a user clicks on their ad. CPC is calculated by dividing the total cost of the ad campaign by the number of clicks generated. This pricing model is often used in search engine advertising, social media advertising, and other performance-based campaigns.

One of the key attributes of CPC is that advertisers only pay when a user takes a specific action, such as clicking on the ad. This means that advertisers are only charged for actual engagement with the ad, rather than just for impressions. This performance-based pricing model can be more cost-effective for advertisers looking to drive specific actions and measure the effectiveness of their campaigns.

Another attribute of CPC is that it allows advertisers to control their costs more effectively. Since advertisers only pay when a user clicks on their ad, they can set a maximum bid for each click to ensure that they do not overspend on their advertising campaigns. This level of control can be especially beneficial for advertisers with limited budgets or specific performance goals.

However, one potential downside of CPC is that it can be more competitive and expensive than CPM, especially in highly competitive industries or for popular keywords. Advertisers may need to bid higher amounts to ensure that their ads are displayed prominently and receive a higher number of clicks. This increased competition can drive up the cost per click and make it more challenging for advertisers to achieve a positive return on investment.

In addition, CPC may not be the best option for brand awareness campaigns where the main goal is to reach a large audience. Since advertisers only pay for clicks, they may miss out on the opportunity to reach users who do not click on the ad but still see it and become aware of the brand. This limited reach can be a drawback for advertisers looking to increase brand visibility and awareness.

Comparing CPI and CPM

When comparing Cost Per Impression (CPM) and Cost Per Click (CPC), it is important to consider the specific goals and objectives of the advertising campaign. CPM is often more suitable for brand awareness campaigns where the main goal is to reach a large audience and increase visibility. On the other hand, CPC is better suited for performance-based campaigns where the goal is to drive specific actions, such as clicks or conversions.

• CPM is a cost-effective option for advertisers looking to reach a large audience for a relatively low cost.
• CPC allows advertisers to pay only for actual engagement with the ad, making it more cost-effective for driving specific actions.
• CPM provides a predictable and stable pricing model, making it easier for advertisers to budget and plan their campaigns.
• CPC offers more control over costs, allowing advertisers to set maximum bids and manage their budgets more effectively.
• CPM may not guarantee specific results in terms of clicks or conversions, making it difficult to measure campaign effectiveness.
• CPC can be more competitive and expensive, especially in highly competitive industries or for popular keywords.
• CPM may not be the best option for advertisers looking to drive specific actions or measure campaign performance.
• CPC may not be ideal for brand awareness campaigns where the goal is to reach a large audience and increase visibility.

In conclusion, both CPM and CPC have their own unique attributes and benefits, depending on the goals and objectives of the advertising campaign. Advertisers should carefully consider their specific needs and target audience when choosing between CPM and CPC to ensure that they achieve the desired results and maximize their return on investment.