Blog

How Is CPM Different from CPV in Digital Marketing

July 29, 2020

How Is CPM Different from CPV in Digital Marketing | AIA Book in a free 30 minute strategy session

It’s often said that digital marketing is both arts and science. But, for the small business owners that are just getting started, online advertising can feel like a math class with abbreviations and formulas they don’t really get. CPM, CPC, CPV, ROI, CPL, CPM < CPC x CTR x 10. We know, we are trying to grow your business, not decipher all these hieroglyphs.

But, the thing is, you can’t create a successful digital marketing campaign without understanding the various pricing models. Because if you don’t understand the pricing options, you may choose the wrong one for your needs and end up spending your budget on something that doesn’t show any real results in the end.

The Implications of Various Pricing Options

Before we explain the difference between CPM and CPV, we think it’s important for small business owners to understand why they need to have this knowledge in the first place. Better put, how should you think about pricing options? And, if you have to choose between so many, how can you tell which one to choose?

Well, it all boils down to three core factors: effort, scalability, and efficiency.

  • Effort: Try to estimate the time, resources, and effort it would take you to set up Google Ads
  • Scalability: This factor refers to your ability to achieve your objectives and scale them. Will the pricing method you’ve chosen help you reach your goals or will it just drain your advertising budget?
  • Efficiency: When we are talking about efficiency, we are actually referring to the return on investment (ROI) for your ad campaign objective. Will the pricing method pay off or it may just be a big waste of time and money?

With that in mind, let’s take a look at the difference between CPM and CPV and see when you should use them.

What Is CPM?

CPM or cost per mile refers to the cost per thousand impressions. An impression occurs when your ad successfully loads and it’s seen by an internet user. So, if you placed an ad for your babysitting agency on the Google Display Network and the ad loads when a user clicks on a page on a website, then that counts as an impression.

Unlike the CPC (cost per click) pricing model, with CPM you only pay for the number of impressions as opposed to every time someone clicks on your ad.

What Is CPV?

Cost per view (CPV) is a pricing model that offers businesses the option to pay every time the ad is displayed on Google Search or the Display Network. So, instead of paying per thousand views, you will pay for every view on your video ads, for example.

CPM vs. CPV: Which One to Choose?

The difference between the two should be quite clear by now. With CPM, you pay for each set of thousand views for your ad. You tell Google how much you are willing to pay for 1000 impressions, and the search engine giant charges you that amount and nothing more. With CPV, on the other hand, you pay for each view.

But, how do you decide which one to choose?

CPM is a good option if you don’t really want customers to click on your ad and buy your products. For example, this pricing option would work great if you would want to promote a conference that you will organise in a couple of weeks. You don’t really want people to click on your ads. You just want as many prospects as possible to learn about the event.

CPV is a very good option if you want to improve your brand awareness. Let’s imagine that you are a restaurant owner who wants to get more repeat customers. But, at the same time, you have a new Happy Hours offer that you want to promote. CPM would be a good way to reach your audience and tell them about your offer while CPV can help you increase the frequency of your customers’ visits.

Do You Need Help with Your Online Advertising Efforts?

As you’ve probably learned by now, online advertising is never as simple as “option A is good for X, and option B is good for Y.” There are a lot of moving pieces that can make or break your ad campaigns and being one step ahead of everyone and everything is a must.

That’s exactly what we can do for you. If you are feeling overwhelmed by the digital marketing endeavour, get in touch with one of our experts at Australian Internet Advertising and we can help your business grow.

Book in a free 30 minute strategy session
Google Reviews Icon