CPM refers to the cost per thousand impressions, with “Mille” being the Latin word for thousand. In this model, affiliates earn a fixed amount for every thousand ad impressions generated on their website or platform.
CPM is calculated by dividing the total cost of the ad campaign by the number of thousands of impressions. The formula is as follows: CPM = (Total Cost of Campaign / Number of Impressions) x 1000 For example, if an ad campaign costs $500 and generates 100,000 impressions, the CPM would be $5.
CPM differs from other pricing models such as CPA (Cost Per Action) and CPC (Cost Per Click). While CPM focuses on impressions, CPA pays affiliates for specific actions taken by referred users, and CPC pays affiliates based on the number of clicks the ads receive. CPM provides a way for affiliates to earn revenue based on ad exposure, regardless of user actions or clicks.
Using CPM in affiliate marketing offers several benefits. Firstly, it provides a predictable and consistent income stream for affiliates, as they earn revenue based on the number of ad impressions. Secondly, CPM allows affiliates to monetize their website or platform's traffic, even if the users don't take specific actions or clicks. Lastly, CPM can be advantageous for affiliates with high-quality content and a large audience, as they can generate a significant number of impressions and earn higher CPM rates.
