Difference between CPM and CPS

In modern times, various works can be done very easily online. Online Advertising or digital marketing is one of them. Online Advertising is a marketing form that promotes products and services to the audiences and the online platform users. The publishers and the advertisers use different types of payment methods to run the business smoothly. These payment methods are CPM, CPS, CPA, CPC, CPL, etc. Here, we will discuss the CPM, CPS and the difference between CPM and CPS.

What is CPM?

CPM is an abbreviation. It stands for Cost Per Mille. Mille is a Latin word. Mille equals one thousand. So Cost per mille (CPM) is also known as cost per thousand (CPT). It is used for measurement in advertising. CPM is the cost that advertisers pay for one thousand impressions. CPM is primarily used for banner advertisements. It is also used for radio, TV, newspaper, and magazine advertising. Advertisers or Publishers use various types of techniques to increase page views, such as using sensational titles, sensational news or sexual content, etc. It is a kind of pop-up type advertisement. CPM advertising means a thousand eyes view an ad, but it doesn’t indicate how many users out of that thousand are actually interested in that ad or the offer.

Formula: Total campaign cost / Thousand impressions.

For example:

• The total cost for campaigning an ad is $200000.
• The total amount of impressions (eyes view) generated is 2000000.
• ($200000/2000000) = $0.1
• CPM = $0.1×1000 =$100

In online advertising, if the ad sells for a $50 CPM, it means it costs $50 to show the ads on 1000 page views.

What is CPS?

CPS stands for Cost Per Sale. CPS is also known as PPS (Pay Per Sale). An Advertising team uses the CPS method to pay the amount of money for every sale generated by a certain advertisement. CPS is calculated by dividing the company’s total amount spent on the ad campaign (the cost) by the sum of all sales made. CPS can be applied to TV, radio and other digital advertisements.

Formula: Total cost/total sales.

For Example:

• The total cost of a campaign for advertising is $125000.
• The total amount of sales of the advertisement is 2500.
• ($125000/2500) = $50
• CPS = $50

Difference between CPM and CPS

The differences between the CPM and CPS are described below.

Basis	CPM	CPS
Full form	The full form of CPM is Cost Per Mille.	The full form of CPS is Cost Per Sale.
Definition	CPM is the cost that advertisers pay for one thousand impressions.	CPS method is used to pay the amount of money for every sale generated by a certain advertisement by An Advertising team
Process of costing	CPM costs for the thousand-eye view of a page.	CPS is the eyes view, and then sale completion.
Risk management	CPM is a high-risk process because the client has to pay the consumer whether he/she shows the ad or not.	CPS is a very low-risk process because the client has to pay only if the ad or order is sold.
Beneficiary	Beginner companies or low-budget companies can benefit from this process because they can get more viewers easily.	A reputed company gets the benefit from CPS rather than CPM because they are already reputed, they don’t need any ads to increase viewers.