How it Works
Advertisements are generally priced based on CPM (cost per thousand impressions). Every time a web page is loaded, that counts as a single impression. So if a business would like to be viewed 200,000 times and the CPM is $4.00, the total cost of the campaign would be $800. In essence, you are paying 0.4 cents per view.
Of course, the CPM rate varies from website to website. There are four main factors that go into CPM pricing for a website: number of unique monthly visitors, complexity of the campaign, the location on the site, and the size of the ad.
1. Unique Monthly Visitors
The number of unique monthly visitors is an indicator of how many individuals visit a site per month. Each unique monthly visitor reflects a fresh set of "eyeballs" that view an advertisement. Sites that have a high number of unique users will garner a higher CPM while sites with a smaller amount of unique users maintain lower CPM rates.
On some of our sites, such as Metra Rail Chicago (www.metrarail.com), we are able to offer advertisers geo-targeting campaigns. Geo-targeting allows advertisers to display their advertisements to individuals that reside in a specific georgraphic location. The technological complexity of these campaigns leads to higher CPM rate; however, the money can be well worth it since the only people viewing your campaign are those you are targeting.
3. Site Location
Another aspect which factors into the CPM rate is your ad's location on the website. Naturally, some ad locations on a website will be more visible to visitors than others. Advertisements that are displayed on the homepage of a site are more valuable than advertisements displayed on a more lightly trafficked page. Also, advertisements that are located near the top of the page -- aka "above the fold" -- will cost more than ads that are located closer to the bottom of the page.
The final consideration for the CPM rate is the size of the advertisement. Advertisements that are bigger in size are more likely to draw the attention of a viewer. Therefore, larger advertisements cost more than smaller advertisements.