How many impressions does it take to make a sale?
This is the big one. Every marketer wants to know how many impressions it takes to make a sale. Unfortunately, there’s no single number that can accurately represent this.
Fortunately, there are ways to make these estimates more accurate. To start with, you should segment your audience by channel. This will help you determine how impressions are affecting different groups of your audience.
When you’re looking at a single platform, each platform has its own target CPM (cost per thousand impressions), which is the average amount you’re expected to pay for 1,000 impressions.
Average CPMs for different channels:
- TV: $12-15
- Digital (Display): $2-10
- Digital (Search): $3-12
- Radio: $10-15
- Print: $4-25
What is an impression?
An impression is simply how many times your advertisement was shown. This can refer to any type of advertisement — it doesn’t matter if it was on TV, radio, print, or digital. When you advertise, you want as many people to see your advertisements as possible. The more people that see your advertisement, the more likely it is that someone will take action.
Impressions can be measured in a few different ways:
- Impressions: This refers to an advertisement being displayed on a website/platform. When someone visits a website, they see ads. The number of times an advertisement was shown to viewers is an impression.
- Average Daily Impressions (ADI): The number of times an advertisement was displayed on a particular website over a given period of time. If you run an ad for one day on a website with 10,000 visitors, you get 10,000 impressions. If you run it for a week, you get 70,000 impressions. The average daily impressions is a much more accurate way of calculating the total number of impressions.
- Click-through rate (CTR): The percentage of people who saw an advertisement that clicked on it.
How many impressions does it take to earn one dollar?
Now that you know how many impressions it takes to make a sale, you can reverse the equation to find out how many dollars your ads need to earn per impression. This shows you how efficiently your ads are performing and helps you determine the minimum payment threshold to stay in business.
To do this, take your average cost per sale and divide it by the average CPM of your advertisements.
Average Cost Per Sale / Average CPM = Minimum amount per impression required to break even
For example: Say you sell fleece blankets and you have an average cost per sale of $50. You also have an average CPM of $8. You could conclude that your ads need to earn $4 per impression for you to stay in business.
eCPM: What is it and why does it matter?
All of the above is important. But it’s not the whole story. Yes, impressions matter. And yes, impressions are one of the key performance indicators that we track to measure the success of our advertising. But impressions don’t tell the whole story. You need to look at the eCPM (effective cost per thousand impressions).
The eCPM takes into account not just the number of impressions, but also the likelihood that someone will take action (click on your ad). The eCPM is the average amount of money per thousand impressions that you’ve earned from your advertisements.
To calculate your eCPM, take your earnings and divide it by the number of impressions for each platform.
eCPM and marketing ROI
The eCPM is the most important indicator for marketers. It shows how well the advertisements are doing and how successful they are. The higher the eCPM, the more likely it is that the ad is going to convert and the more money you’ll make from your investment.
When calculating your eCPM, it’s important to take into account all of the expenses of your campaign. This is because your ad costs are not just your ad spend. There are other costs to consider — like the cost of acquiring new customers or the time it takes to service those customers.
One of the best ways to determine your ad ROI is to take a look at your gross profit margin per customer. This will let you know exactly how much profit you make on average for each customer.
Impressions are a great way to measure the effectiveness of your advertisement. However, the eCPM is the number that really matters. It tells you how much money you’re making per impression. And that’s exactly what you’re looking for.
When measuring the effectiveness of your ad spend, it’s also important to keep in mind that these numbers take time to accumulate. It might take a few months for your ad campaigns to start showing results.
And with that in mind, don’t get discouraged if you don’t see immediate results. Just keep investing in your ads and you’ll be well on your way to building a successful business.