With most of your campaigns, you pretty much know what rates make for a solid campaign and a reasonable acquisition cost.
With email advertising, however, the numbers you can expect to pay aren’t always so clear. CPM rates can be all over the place, depending on which list you’re looking at. Sometimes, it seems like nobody really knows what email CPM rates should be.
Of course, email CPM is an important metric to nail down—as with any form of advertising, the effectiveness of sponsored content, including email advertising, comes down to ROI.
That’s why we’re here to help. By clearing the mystery around email CPM rates, as well as the other metrics you need to determine the value of a campaign, you’ll be able to send your email campaigns with confidence.
What is a Good Email CPM Rate?
The way that email advertising rates are set is by CPM, or cost per thousand subscribers on the list.
That means that a $500 campaign, sent to a list of 20,000 subscribers, will cost you $25 CPM. Spend that same $500 on a mailing to 50,000 subscribers, however, and your CPM will drop to $10.
CPM is a useful metric for comparing the cost of working with one publisher to the cost of working with another publisher that has a vastly different list size.
So, what makes for a good CPM? Generally, we’ve found that our advertisers like to stay under $30 CPM for dedicated email campaigns.
Of course, pricing always depends on the particular list you’re looking at. In order to spend $30 CPM, you probably want to find a very targeted list that has good open and click rates.
Campaigns to more general topic publishers that have lower click and open rates will have a lower target CPM. Similarly, CPM will be lower on sponsored email campaigns, since the email is not entirely devoted to your message as an advertiser.
That said, email CPM rate is just one measure that you should consider when you’re looking to work with a potential publisher. After all, CPM only measures based on the number of subscribers on a given email list, not based on how many actually open or click on your emails ads.
That’s why, here at Paved, we encourage you to look at the cost per click (CPC) and cost of acquisition (CPA) that you might get when you work with a particular publisher on a campaign.
How to Calculate CPC and CPA
CPC and CPA give you a more realistic sense of the cost of a campaign by comparing the cost of the potential outcome of a given email send. That means you aren’t just examining the cost of broadcasting your message, but of getting actual engagement.
CPC and CPA take into account the engagement metrics, like open and click rate, that are so important for determining the value of a campaign.
Plus, CPC and CPA give you a metric that is easier to compare to other advertising campaigns you’re running at the same time, allowing you to compare email advertising ROI to social, display, and other kinds of ads.
To calculate the potential CPC of a given campaign:
- Multiply the number of subscribers by the publisher’s click rate (20,000 subscribers, with a 10 percent click rate = 2000 clicks expected for a campaign).
- Figure out the total cost for a campaign (20,000 subscribers, with a $25 CPM = $500).
- Divide the total cost of the campaign by the expected clicks ($500 / 2000 clicks = 25 cent CPC).
You can combine that CPC calculation with the conversion rate on your own landing page to get the approximate CPA of a potential campaign:
- Divide the total expected clicks by your landing page conversion rate. (2000 clicks, with a 3% conversion rate = 60 conversions).
- Divide the total cost of the campaign by the expected conversions from the campaign ($500 / 60 conversions = $8.33 CPA).