What Is an Average Banner CPM ?

With so many marketing channels available to publicize products and services, advertisers must choose the right outlet to ensure they get the best return on investment. Many businesses use banner ads to drive traffic to websites. Also known as display ads, this form of advertising appears somewhere on a webpage in hopes of grabbing the consumer's attention. The rate to run a banner ad is based on a factor known as cost per mille (CPM). Mille is defined as 1,000 impressions and an impression is a page view by a consumer.

Average Rates

• The average CPM rate for online display ads was $2.80 as of the date of publication. Those rates may reach an average of $4.68 over the following three years, according to Forrester Research, a global research and advisory firm. The jump is largely due to a potential shift in what is considered an impression. Originally, an ad racked up impressions each time it appeared on a web page. In the future, however, the ad will have to be visible on the user's computer screen to count as an impression. If, for example, the user doesn't scroll down on a web page, ads at the bottom wouldn't be considered an impression, as they are now.

CPM Rates Vs. Traffic

The term "cost per mille" refers to a form of online advertising in which the payment rate is set to a specified amount for every thousand times an advertisement is viewed. For example, if an advertisement has a CPM rate of $10 and is viewed 1,250 times, the publisher displaying the advertisement receives $12.50.

CPM Ad Networks

• CPM ad networks typically deal with large publishers whose websites receive thousands of visits each month. Casale Media, CPX Interactive and Tribal Fusion are three networks that serve CPM ads. Casale Media requires a minimum of 50,000 unique monthly visitors, while Tribal Fusion requires a minimum of 500,000 unique monthly visitors. CPX Interactive requires a minimum of 10,000 monthly pageviews.

Increasing CPM Earnings

• Because CPM ad networks pay according to the number of people who see an advertisement, the primary way to increase your CPM earnings is to increase the amount of traffic your website receives. However, because a CPM ad network typically pays according to the number of unique individuals who view an advertisement in a given time frame, it is vital that your website generates many first-time visitors. Optimize the content of your website for maximum search engine visibility to encourage new visits.

How to Set the CPM

CPM, when used in reference to online advertising, refers to Cost Per Mille or Cost Per Thousand. This is the cost charged to an advertiser for every thousand views of an ad. If you are running a website and want to add advertising to it, CPM is one method of costing to determine the advertising rate. Several factors go into calculating the CPM rate, such as overall traffic, the size of the ad and its actual placement on the page.

1 :-Look up your current website traffic numbers. You will need to be realistic here if you want to keep your advertisers. If you do not have more than 10,000 unique visitors (as opposed to page views), you cannot charge a premium rate for your CPM. A site with less than 10,000 visitors a month can typically charge around $10 or less per CPM. If you have a very high rate of traffic -- such as more than 100,000 unique visitors per month, you can charge as much as $50 a CPM or even higher, depending on the buying habits of your website visitors.

2 :-Consider the placement of the ad. An ad placed at the top of a page or above the "fold" will cost more than an ad placed at the bottom of a page. The "fold" refers to the amount of website seen on a monitor without scrolling down. Set a sliding scale that reduces the price per CPM for ads that appear lower on the page.

How to Calculate CPM Rates

CPM stands for cost per thousand impressions. CPM is an advertising term to see how cost-effective an advertising campaign is. The less the cost per thousand impressions, the more efficient the advertising. The higher the cost per thousand impressions, the less efficient the advertising and the more likely that the company is wasting money on its advertising.

Instructions

1 :-Determine the number of units of advertising. The number of units is equal to the number of impressions divided by 1,000. For example, a company takes out ad space and estimates 500,000 people see the ad. So, 500,000 divided by 1,000 equals 500 units.

2 :-Determine the total cost of the ads. In our example, the ad cost the company $5,000.

3 :-Divide the cost of the ads by the number of units to calculate CPM. In our example, $5,000 divided by 500 equals a CPM of $10.

How to Increase Your CPM

One of the most common Internet advertising models is CPM, or cost per mille, which pays the advertiser a flat rate for every 1,000 times an advertisement is displayed on their website. The price of the CPM is reflective of the quality of impressions an advertiser is receiving. If an ad is being displayed a lot of times, but resulting in few sales, an advertiser will pay a lower CPM to account for the low quality traffic.

Instructions

• 1 :-Give your ads key position. Successful advertising depends largely upon the location of the ad. The most valuable real estate on a website is the area referred to as "above the fold," meaning the part of a page a user can see without having to scroll down. Placing ads in this area will increase the probability that they will be clicked on, thereby increasing the value of the ad displays you are serving.
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• 2 :-Keep the ads relevant. Displaying ads that are somehow related to the subject matter on the page is a great way to make sure the advertisement is seen by a targeted audience of people. Athletic products, for example, can be successfully advertised on sites related to health and fitness. Because the audience has a known interest in the subject, you want to display ads that relate to their interest.