CPM simply explained: Definition

Cost Per Thousand (CPM), also known as Costs Per Mille, is a marketing term that refers to the price of 1,000 advertisements. This term also exists in the print sector. Here it is called the “thousand contact price” (CPM).

How much does it cost us to have 1,000 people see our advertisement?

If a website publisher charges 2.00 Euros, this means for you as an advertiser that you have to invest 2.00 Euros to get 1,000 impressions.

CPM is the most common method of pricing web ads in digital marketing.

Advertisers pay website owners a fixed fee for every thousand impressions of an ad. While an impression measures how often an ad has been displayed on a website, it does not measure whether an ad has been clicked. For this you use the click through rate (CTR).

CPM and CPC: What is the difference?

If you place online advertising (ads), you will be charged in two price models.

1. CPM (Cost per Mille) = cost for 1,000 impressions
2. CPC (Cost per Click) = cost per click

What is a good CPM?

What is a good price? In the end it always depends on the product, the industry and the competition. In the financial services sector, CPM values of up to 4.50 euros are acceptable. For retailers and chain stores rather 1.40 Euro, maximum 1.50 Euro. So if you are offered a CPM below this amount, then, generally speaking, that is a good deal.

Worldwide digital marketing

In 2021, online is expected to account for 52 percent of global advertising expenditure for the first time (source: Internet World). This is the general trend in spending on online advertising worldwide in the years 2014 to 2020, as well as a forecast up to the year 2024.

• 2014 – USD 146.62 billion
• 2016 – 191.87 billion USD
• 2018 – 283.35 billion USD
• 2020 – USD 332.84 billion
• 2022 – USD 441.12 billion*
• 2024 – USD 526.17 billion*

*Forecast from Statistia

Tip! Link Tracking with Google: UTM parameters

In online marketing, often nothing is more important than measuring success. For campaigns on social media networks like YouTube, Facebook, Instagram and TikTok, but also for Google Ads and Native Ads.

UTM parameters: Definition and example

How do you know if your efforts in online marketing (whether advertising or organic content marketing, etc.) are successful? UTM parameters are the answer.

Definition: visitors / follow links

UTM parameters give you the ability to identify your traffic (visitors) by their source (i.e. origin). For example, you can see which visitors came through page XY to your landing page for product XY.

• Read: UTM-Parameters

Search algorithm: Google Updates

How does the Google algorithm work? How does Google sort the search results? How does the page rank work?

Every year, Google makes hundreds of changes to the search algorithm. In 2018, they reported an incredible 3,234 updates, averaging nearly 9 per day. Although most of these changes are minor, Google occasionally makes major algorithmic updates (like Panda and Penguin) that significantly impact search results.

For search engine marketers, knowing when major Google updates occurred can help explain changes in rankings and organic website traffic, and ultimately improve search engine optimization.

Many who only maintain a single domain do not know the impact that such an update of the algorithm has on different sites. To give you a little insight into how such a change affects the rating of pages or the number of impressions, i.e. the display within the search results, we have some interesting screenshots for you.

Effect on Google.de: 4 days later

These screenshots show Google Search Console. It shows what successes a single domain has in the Google search engine. All rankings are listed, i.e. all keywords or keywords for which your website or e-commerce is placed.

Some sites benefit from such updates in the algorithm, while others lose extremely in value. Without digging too deep into the sewing box, there have been some worried calls in our agency.

The tenor is then mostly relatively the same, our site suddenly crashed! -40%, -50% in range. Circa 100 live visitors, suddenly there are only 50. Accordingly, the update of the algorithm has a big impact on website operators.

Who wins, who loses?

The effects refer to the general content quality standards. Who offers his reader the most added value?

1. Unique Content – Unique Content
2. Visual media – increase retention time
3. Sharing – How often is your site shared
4. Left – Outgoing and incoming links
5. …

Those who make the most effort benefit from such updates.

How does an algorithm work?

Why don’t we ask Google… How does an algorithm work?

Now let’s look at some examples.

Best Practice: SEO impact

Here you see pages from our (so to speak, private portfolio). This includes our companies. Here you can see how such an update affects domains.

• 65% of our domains are constant
• 25% increased moderately in range (approx. ~5% growth)
• 5% increased strongly in range (approx. ~20% growth)
• 5% dropped in the ranking (test projects including scraping)

Test projects that were not filled with qualitative content decreased in reach. All others (95%) for which we put a lot of effort (as you can see in this article) went up.

Loser: Example real estate (scraped data)

Project: Confidential.

This is how things can go down when test projects are based purely on data, not on “human” texts. One of our side has been hit extremely hard!

Consistent

65% of our domains have hardly changed or, as can be seen here, have remained the same in terms of organic growth.

Winners with strong increase: Example fashion magazine

Here you can see our modemagazine.

The first day I thought, why?! Then, after 3, 4 days it went steeply uphill!

This testing in the first few days was also the case for other domains, which also recovered but did not receive an additional push.

Winners with strong: example real estate

Project: Confidential.

Not everyone can or will want to book agent services or extensive software. Particularly young brands and start-ups operate their own online marketing, so also Influencer Marketing. But also students at universities and colleges have to prepare their first calculations. We want to give you today a first, small help to assess the success of influencing campaigns before the booking. Our form collection with a few of the important formulas in simplified form.

Why calculate success factors for influencers?

Everyone can buy Likes and Follower. In search engines you only have to enter the search term “Fans buy Facebook” and hundreds of websites already come. Likes from abroad, Likes from Germany, comments and fans. Everything is possible.

Making a channel 100% fake and artificially keeping it authentic through likes over a long time is not so easy, but equally possible. At the beginning of the year there was a best practice of a US-American advertising agency. She has been pushing for months a complete channel invented. The pictures came from the Fotostudio, the blogger was a booked model. All fans, likes and comments were added in a targeted and coordinated manner. At some point, the first Werbedeals came. The agency wanted to prove to its customers with the action how easy it is to create successful fake channels.

This, however, requires constant planning and is difficult for private individuals to carry out for time and monetary reasons. Nevertheless, there are many who buy 1000 fans. With 70,000 fans 1,000 bought not at all. To identify such purchased likes, agencies use social media software.

In principle almost all users are honest. Also because bought fans press the interaction rate. They are bought and do not interact at all. They will never liken, never comment. Therefore the commitment rate gives a good indication of the quality of the influencer.

Engagement rate: Interaction rate as a quality feature

This formula can be refined by additional elements. For this, however, you need data that, in turn, require software that specifically deals with the social network and permanently records the data of all users. It’s simple and fast:

• Engagement rate = Number of followers / (Likes + Comments * 2)

Digression! Social bots influence commitment rate

Social bots also play a major role in the social networks. Through social bots like Instazood for Instagram or even qualitative alternatives like Combin. Why? Comments and Likes are not distributed by organic users, but by a program. Maybe you know Kommtare like “cool picture” or “awesome post”. With high probability this is by a Bot. Gefakte Likes are (against without software) only very, very difficult to register or recognize. You can not exclude them with a simple formula. But they do not make up the bulk of the interactions.

Engagement Rate: Distribution by followers

The larger the blogger becomes, the more people follow him or her for reasons of familiarity. Easily writable by stars, musicians or soccer players. The more familiar the person becomes, the lower the interaction rate is by nature. Here are some rough experience for you:

• Up to 50,000 fans of 8-20%, partly also 25, 30% with extreme tips, on average 8-12%
• 50,000 – 100,000 fans of 6-14%
• 100,000 – 500,000 fans of 5-11%
• 500,000 – 1,000,000 fans of 4-9%
• 1,000,000 – 5,000,000 fans of 2 -6%
• 5,000,000 – 10,000,000 fans of 1-4%

Influencer Prices: So much cost Youtuber and Instgrammer

Facebook has become little attractive for organic traffic. Facebook is good for ads. Organic traffic is generated on Youtube and Instagram. The prices and costs for influencers differ on the two social networks.

Costs and prices for influencer on Instagram

Instagram is cheaper in relation to Youtube. Why is that? Posting on Instagram are generally relevant for only 24 hours of relevance. The trendings show content 24 hours. The stream partially longer, but only if you follow relatively few people. The more new content comes (the more people you follow) the less content remains for old content. Also the stories have only a short holding time of 24 hours. In addition, stories are almost exclusively seen by their own fans.

Costs and prices for influencer on Instagram

Calculate impressions: reach of postings and stories

On Youtube, the clicks are easy to read, for everyone. Likes, comments, everything first relevant can be seen. It is quite different with Instagram, because here, for example, Stories are only issued to their own fans. Monitoring is thus very time-consuming. With the postings, you see no information on the range. Who wants to calculate the range nevertheless, for which we have here a few guideline values for the calculation of the range of Influencer campaigns on Instagram.

• Impressions of a posting = number of followers / 1.52
• Impressions of a story = number of followers / 27.46
• Classification of Influencers: PAM (People Attraction Method)

As we reported in the article Classification of Influencers in the middle of the year, there are different categories. They are hardly used in day-to-day agency work, but provide a good way of classification for scientific work or even offers.

Classification of Influencers by PAM (People Attraction Method)

There are three subcategories:

1. PAM | Extraterrestrial up from 300.000.00
2. PAM | Global up to 300.000.000< PAM | Standard up to 3.000.000
3. PAM | Special Interest up to 600.000

Pico, Nano and Micro Influencer

All the values can be taken exactly from the table. The classification is carried out in the classical classification of pico, micro and micro. As a formula is also used to calculate the costs and prices of campaigners.

ROI Success Measurement: Calculation of the Return of Invest

Now, after the campaign has been planned and thought through, the ROI is now going to the real success measurement. The return on investment (ROI) shows whether the investment is profitable. The ROI can also be calculated for inflation campaigns. The easiest way is to use short links or pixels. They all draw clicks and so you can quickly see if enough people have clicked.

• Sponsored Posting is purchased for 100 euros
• 50 people click on the link
• 10 people buy the product for 25 Euro
• 250 Euro sales were generated

Now you can calculate the ROI:

• ROI = Revenue / Investment for Sponsored Post
• 2.5 = 250/100

The ROI (2.5) is positive and therefore profitable for the company. If different campaigns are active for a campaign, the different ROIs can be compared with each other at the end of a campaign.

The ROI, however, works only with products and only if the derivation is valid. Links and pixels allow a conclusion. They must therefore be placed in the influemecer’s posting. In Instagram this is not possible (only once in the profile but not in the posting), so here are also used gladly codes like “shop my style and get 10% discount with #bloggerXY10”.

These practical tips will help you as a young social media manager to calculate and calculate first influencer campaigns. You can find more practical tips and help at our social media blog.