Where is it used?

Both CPM and CPI are commonly used in online advertising and influencer marketing to evaluate the cost-efficiency of reaching a specific audience size. They provide a standardized measure for comparing the cost of different marketing strategies or influencers in terms of potential audience reach.

When to use it?

CPM is particularly useful when the primary goal of an influencer marketing campaign is to increase brand visibility and reach a large number of people, regardless of whether they interact with the content. CPI offers a similar perspective but on a per-impression basis, which can be more granular for analysis.

How to use it?

• CPM: The formula for calculating CPM is: (Total Cost of Campaign / Total Impressions) × 1,000. For example, if a brand pays an influencer $500 for a post that generates 100,000 impressions, the CPM is ($500 / 100,000) × 1,000 = $5.

• CPI: The formula for CPI is: Total Cost of Campaign / Total Impressions. Using the same example, the CPI would be $500 / 100,000 = $0.005 per impression.

Why do we need it?

These metrics help advertisers and brands understand the cost-effectiveness of different marketing strategies or influencers in terms of audience reach. A lower CPM or CPI generally indicates that more impressions are being achieved for the same amount of investment. However, it's important to consider these metrics alongside engagement and conversion rates to get a holistic view of campaign performance.