Target CPM is one of those ad bidding strategies that people rarely talk about, much less write about.
Those of you with a swelling pineal gland may have visions of skidding broadside, in a cloud of black smoke and a telling smile on your face that your Google Ads Target CPM just paid off.
Others may proclaim a bleak prophecy that a tCPM campaign is a one-way ticket to the grave.
The reality is that most businesses are somewhere in the middle with either a modicum of success or failure.
Some view Google Ads as the salvation to a problem they face while others will see online advertising as a money pit.
This article looks to increase your chances of success with Google Ads’ Target Cost Per Thousand Impressions (Target CPM or tCPM for short) by answering all of the most important questions you’ll undoubtedly have about this auto bidding strategy.
What is Target CPM anyway? (Target Cost per Thousand Impressions)
The main aim of tCPM is to get as much visibility as possible for your ads within your budget. This is sometimes referred to as unique reach.
Target CPM (also known as tCPM and Target Cost per Thousand Impressions) is an automated bidding strategy in Google Ad Manager that lets you set how much on average you’re willing to pay every thousand times your ad is seen by a unique viewer.
This amount is your target CPM, meaning that Google Ads will then try to keep your campaign’s average CPM equal to or lower than the tCPM you set.
This is great because nobody wants to set fire to their marketing budget.
Okay, so what’s Google Ads’ unique reach?
You’ve probably experienced this more times than you can count:
So imagine you’re on a laptop and you play a video on YouTube. Before the video plays you see an ad for shampoo.
Later that day you pick up your mobile to watch a different video. The same pre-roll advertisement for the shampoo brand plays before the video is shown to you.
If you were to track the impressions of the shampoo ad, then despite you counting as one unique viewer, the above example would equal two impressions (one on your laptop and one on your mobile).
As an advertiser, unique reach is a way to measure the total number of people who view your ad.
This may sound easy, but when you consider that Google has billions of users who own more than one device, then it’s extremely difficult to track everyone.
Explain to me how Google Ads knows the unique reach of my ad?
Google Ads uses statistical models to determine how many users are reached on a particular device.
This is done by observing aggregated user behaviour across different browsers and devices, accounting for cross-device usage patterns.
This data is then combined with other signals like census surveys and Google Gallup in order to deduplicate an audience.
While unique reach is just a statistical model – and not a precise tally of individual viewers – the amount of information that Google collects and analyses from its customers and users is staggering.
This means that when Google analyses all of the data that they have access to, their statistical models for calculating unique reach are extremely accurate.
What is the target cost per thousand impressions used for?
The tCPM bidding strategy works best for expanding your audience and re-targeting campaigns.
This is useful when you want to use video views or engagement as social proof to achieve the same goals as with clicks and website visits.
If your goal is website conversions, we recommend using target ROAS (return on ad spend) or target CPA (cost per acquisition) bidding instead.
What are common uses for tCPM?
Target cost per thousand impressions is commonly used for video campaigns and expanding and re-targeting campaigns.
However, some brands that want to build brand exposure from their marketing campaign may choose to use tCPM.
For target CPM how much is too much?
The advertising platform you choose to have your ads seen – Google Ads, Facebook, Instagram, YouTube, Pinterest and many more – will have a different cost per thousand impressions.
Determining your target CPM or a good YouTube CPM involves a few steps:
- A typical CPM rate is your industry’s average CPM: This can be done by using Google Ads’ Campaigns tab and selecting “Details” under “Measurements.” There, you’ll see a list of all industries and their corresponding average CPM. Alternatively, studies and industry surveys may include a benchmark(s) for cost per thousand impressions and target cost per thousand impressions. Just make sure to check recent reports in order to find what Target CPM rates are in 2022 (and beyond)
- Figuring out how many impressions your ad needs: To do this, divide your goal by 1000. So if you want to achieve 10,000 clicks, your ad would need 10,000/1000 = 10 impressions
- You can calculate your Target CPM by multiplying your target CPM by the impressions your ad needs: If your target is to get 10 clicks and your industry’s average CPM is 1.39, then ideally you should pay about 13.9 cents per click (10/1000*1.39)
- Check if the results of this calculation make sense for your business: In our example, a tCPM of $0.20 cents is above Google’s typical minimum bid of $0.12 cents, so it would be better to lower your target. Alternatively, higher target CPM might be appropriate if there are other marketing channels that can drive more value from each impression – such as sending people who click your ads to a landing page with a high conversion rate
What is target CPM in YouTube ads?
Your Target CPM in YouTube ads is how much you are willing to spend for every 1,000 views on YouTube. Google Ads Manager will then look to match or be lower than your YouTube Target CPM.
Do I want a high or low CPM?
Seriously?!?
You want your CPM to cost you as little as possible so that you make a return on your ad spend.
How can I improve my CPM?
If you are using Target Cost Per Thousand Impressions, then Google will optimize your ad placement automatically with the average cost to retailers being $1.30 per thousand impressions.
One way to improve your CPM is to get a better Quality Score for your ads.
What factors affect tCPM?
Your industry, keywords and competition all play a role in how much you have to pay per one thousand impressions. However, a pro tip is to look at your Quality Score.
Anyone who refuses to improve the Quality Score of their ads will inevitably have to pay more than their competitors. This is because Quality Score is an important factor that may influence the cost of your Target Cost Per Thousand Impressions campaign.
Yikes, so what is Quality Score and how do I improve it?
Quality Score is a rating system created by Google that looks at your ad, targeting and landing page on a scale of 1-10 (with 10 being the highest quality experience possible)
The following factors affect your score:
- CTR – Click-through rate is an estimation of how likely someone will click when they see your advertisement
- Landing Page – If the content of the landing page is relevant to the ad
- Ad Relevance – Is the ad relevant to the search term used by the person viewing it
Improving one or more of the above will mean that your CPM will be lower than before as Google Ads will award a higher Quality Score to your advertisement.
Conclusion to Target CPM: How Much is too Much?
Thank you for taking the time to read this guide to Target Cost Per Thousand Impressions.
By now, you know more about tCPM (and if it’s a good Google Ads campaign for your goals) than most entrepreneurs, marketers and business owners.
If you want to maximise the exposure of your ad campaign, then tCPM is the best option. However, should you want conversions, then look to other bidding options.
Good luck and don’t forget to leave a comment below with your thoughts and questions about Google Ads and Target CPM.
I am still trying to learn this strategy