Social media advertising, with all of its various targeting and cost options, can be confusing. Understanding the differences between CPM vs CPV, for example, can help you better determine which options are best for your social strategy.

Read on to learn more about these two acronyms and how they compare. Readers who are new to the world of social media marketing may find the alphabet soup of marketing terms challenging to understand.

CPM vs CPV: What is the Difference?

The two acronyms in this article – CPM andCPV - both refer to ways to measure different costs related to placing ads onsocial media sites. Both have their own advantages and disadvantages dependingon your unique business needs.

Knowing which is best for you requires someresearch and an understanding of your company’s current situation as well aswhere you want your marketing efforts to go in the future. In this article, wewill explain the differences between CPM vs CPV so that you can make aninformed decision about which one is right for your social media ad campaign.

CPM

CPM stands for “cost per thousandimpressions.” An impression is the number of times a user sees your ad,regardless of whether they click it or not.

CPM rates are most commonly used fordisplay advertising, where advertisers are charged based on the amount of realestate their ads take up on a website. Display advertising is the most commonterm for banner ads and other types of advertisements that appear on the pagesof a website rather than within the site’s content.

CPM is the most common ad pricing model onsocial media sites. Social media networks often have a lot of ad space thatneeds to be filled, so they have a lot of demand for CPM ads. In addition tobeing the standard, CPM rates are also easy to calculate. You simply multiplyyour ad’s daily budget by the amount you’re paying per thousand impressions.

The main drawback of CPM advertising isthat the amount you pay can vary significantly from day to day. Since the priceis determined by the amount of ad space available, you never know how manytimes your ads will be displayed during a given day. As a result, you maysometimes find yourself paying a lot more for ad space than you had planned.

CPV

CPV stands for “cost per view.” This typeof pricing is typically only available for video ads. Essentially, you arepaying for each video view, regardless of whether or not the viewer watches thewhole thing. CPV is commonly used in video marketing campaigns where the goalis to drive a certain amount of views to the video rather than a high number ofclicks. While it can be used in other situations, it’s most commonly associatedwith driving subscribers to a YouTube channel.

CPV rates are similar to CPM rates in thatthey are easy to calculate, and you are charged a set amount for each view.This can be a positive or negative aspect depending on your goals. If you’retrying to drive a high number of views to your video in order to increase yourchannel subscribers, for example, then a CPV structure gives you a lot of flexibility.However, if you need to know what your total ad costs will be before thecampaign even begins, then CPV might not be a good choice for you. Since eachview of your ad is charged as a separate unit, it’s impossible to know how muchyour ad campaign will cost until the entire campaign is over.

Defending the Confusion: What’s the Difference Between CPMand CPV?

The main difference between CPM vs CPV isin how they are calculated. CPM rates are charged based on the amount of adspace on a given site. This means that more ads will be displayed on the site,which will lead to many more impressions, and therefore more ad views.

CPV is based on the amount of views of aspecific video. If a video has a high number of views, then the video will becharged a high amount. If a video has a low number of views, then the videowill be charged a low amount. Because of this difference, you can control theamount you pay for a campaign based on CPM, but you can’t control the amountyou pay for a campaign based on CPV.

CPM is also charged as a daily rate,meaning that the ads are charged the same amount regardless of how many timesthey are displayed or clicked on. CPV is charged per view, meaning that themore times a video is watched, the more times it is charged. In sum, CPM means“cost per thousand impressions.” It’s a rate that is charged based on thenumber of times an ad is displayed. CPV means “cost per video view.” It’s arate that is charged based on the number of times a video is watched.

Why Does Knowing the Difference Matter?

The differences between CPM vs CPV gobeyond just the way they’re calculated. They also have different goals. CPM adsare designed to drive impressions, which can lead to clicks and eventually leadto customers.

CPV ads are designed to drive views thatlead to more subscribers and therefore more viewers of future content. Knowingthe difference between the two rates can help you to determine your goals for acampaign. If you want to drive a high number of clicks to your website, thenCPM rates are likely better for you. If you want to drive a high number ofviews to a video, then CPV is likely better for you. This is especiallyimportant to keep in mind when using two terms that are easily confused. CPVmay be more appropriate for your goals and yet you may accidentally choose CPMbecause you didn’t realize they were different rates. This can lead todisappointment if you don’t achieve the results you want based on the type ofrate you’re paying. Knowing the difference between CPM vs CPV can help ensurethat you choose the best rate for your ad campaign.

Summary

CPM stands for “cost per thousandimpressions” and is often used for display ads. CPV stands for “cost per videoview” and is used for video ads. CPM rates are easy to calculate, but you can’tcontrol the amount you pay for a campaign. CPV rates are difficult tocalculate, but you can control the amount you pay for a campaign. CPM rates arebetter for driving impressions, while CPV rates are better for driving views.When choosing CPM vs CPV, it’s important to consider your marketing goals.

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