FIND YOUR CONSULTANT
JOIN OUR COMMUNITY
FIND YOUR CONSULTANT
JOIN OUR COMMUNITY
Resources >

The Ultimate Guide to Marketing Analysis >

Ad Cost Per Impression Analysis

Ad Cost Per Impression Analysis

Goal of the analysis:

The goal of the Ad Cost Per Impression (CPI) Analysis is to determine the average cost incurred by the organization for each impression of an ad. Cost per impression indicates how efficiently a campaign reaches its audience in terms of spending and helps assess the cost-effectiveness of ad placements. By analyzing CPI, the organization can compare platform efficiencies, optimize budget allocation, and identify areas for reducing costs while maximizing visibility.

Data required:

  • Ad Spend Data:

    1. Total ad spend for each platform or campaign (e.g., Google Ads, Facebook Ads, LinkedIn Ads)
    2. Breakdown of spending by ad or channel to assess CPI across various sources

  • Impression Data:

    1. Total number of impressions for each ad or campaign across platforms
    2. Impressions segmented by platform or campaign to analyze cost differences

  • Benchmark and Historical Data:

    1. Past CPI data from similar campaigns for internal comparison
    2. Industry benchmarks for CPI to understand performance relative to competitors

Detailed step-by-step instruction on how to conduct the analysis:

  1. Gather Ad Spend and Impression Data

    • Access the advertising platforms (e.g., Google Ads, Facebook Ads) to collect total ad spend and impression data for each ad or campaign.
    • Record total spend and impressions separately for each platform to facilitate platform-specific analysis.

  2. Calculate Cost per Impression (CPI)

    • Use the formula: CPI= Total Ad Spend ÷ Total Impressions
    • Calculate CPI separately for each ad and platform to identify cost differences and determine the most cost-effective sources.

  3. Compare CPI Across Platforms and Campaigns

    • Segment the data by platform or campaign to identify which sources offer the lowest CPI.
    • Compare CPI for different ad formats (e.g., video, display, carousel) to determine if certain formats provide more cost-effective impressions.

  4. Benchmark Against Historical and Industry Data

    • Compare the current campaign’s CPI with past campaigns to assess improvements or increases in cost efficiency.
    • Benchmark CPI against industry averages to gauge performance relative to competitors and industry standards.

  5. Analyze CPI Over Time to Track Trends

    • Track CPI over time (e.g., daily or weekly) to identify any trends or anomalies, such as periods of increased costs.
    • This can highlight optimal times for ad placements and identify if certain time periods increase CPI.

Format of the output of analysis:

  • Summary Table: Display total impressions, ad spend, and CPI by platform or campaign.
  • Graphical Representation: Use bar charts to compare CPI across platforms or campaigns, and line charts to show CPI trends over time.
  • Benchmark Comparison: Table or chart comparing current CPI with historical and industry benchmarks.
  • Platform Breakdown: Summary showing CPI by platform, ad format, or campaign for easy identification of cost-effective sources.

How to interpret results:

  • Low CPI: Indicates efficient spending, as the campaign achieves a high number of impressions for a relatively low cost. This is desirable for campaigns focused on broad reach and brand awareness.
  • High CPI: Suggests that each impression is costing more, which may require optimization if the goal is to maximize reach. High CPI could indicate that the target audience is more competitive or that ad placements could be adjusted for efficiency.
  • CPI Variations Across Platforms: Platforms with lower CPI indicate higher cost-effectiveness, while platforms with higher CPI may need reevaluation or budget adjustments.
  • Benchmark Comparison: A CPI lower than industry benchmarks is favorable, indicating the campaign is more cost-efficient than average. A higher-than-benchmark CPI suggests room for improvement in ad spend allocation or platform selection.

Steps a company can take to improve on this measure:

  1. Optimize Platform Selection for Cost Efficiency

    • Identify platforms with lower CPI and consider allocating more budget to these sources, which offer more impressions per dollar spent.
    • Reevaluate high-CPI platforms and consider adjusting targeting or reducing budget allocation if they are less cost-effective.

  2. Adjust Targeting to Improve Reach Efficiency

    • Broaden targeting parameters slightly if the audience is too narrow, as overly specific targeting can increase CPI due to limited reach.
    • Test different demographics and interest groups to determine if certain audiences provide lower CPI without sacrificing relevance.

  3. Experiment with Different Ad Formats

    • Test a variety of ad formats, such as video, carousel, or static display ads, to determine which format provides the most impressions at the lowest cost.
    • Use A/B testing to identify cost-effective creative approaches that maximize reach.

  4. Refine Bidding Strategies

    • Use automated bidding strategies or bid caps to control spending and optimize for lower CPI where platform features allow.
    • Monitor bid performance regularly to ensure that bids remain cost-effective for reaching the desired audience.

  5. Schedule Ads During Low-Cost Periods

    • Use impression and cost data to determine peak times for lower CPI and schedule ads during these windows to increase impressions at a lower cost.
    • Avoid high-cost periods unless they are essential for campaign goals, as these can drive up CPI.

  6. Leverage Retargeting to Increase Efficiency

    • Implement retargeting ads to show ads to users who have previously engaged, which can result in a more cost-effective way to generate additional impressions.
    • Retargeting often costs less per impression as it focuses on a warm audience likely to engage again.

  7. Continuously Monitor and Adjust in Real-Time

    • Track CPI regularly during the campaign to make timely adjustments if costs begin to increase.
    • Real-time monitoring allows for quick optimization, ensuring that ad spend remains cost-effective throughout the campaign duration.

Benchmark Comparisons:

General CPI Metrics

  • Average CPI: The average CPI across different industries typically ranges from $0.10 to $2.00 per impression. This serves as a baseline for evaluating ad costs.
  • High-Performing Campaigns: Successful campaigns may achieve lower CPIs, especially when targeting niche audiences or utilizing effective bidding strategies.

Platform-Specific CPI Benchmarks

  • Google Ads:
    • Search Ads: The average CPI is approximately $0.38 to $0.50, reflecting the high value of reaching users actively searching for specific products or services.
    • Display Ads: Average CPI is around $0.10 to $0.30, making it more cost-effective for generating impressions compared to search ads.
  • Facebook Ads:
    • The average CPI for Facebook ads is about $0.50 to $1.00, with variations depending on ad placement and audience targeting. For example, ads in the news feed generally have higher engagement and may command higher CPIs.
  • Instagram Ads:
    • Instagram’s average CPI is approximately $0.60 to $1.20, slightly higher than Facebook due to its visual nature and strong engagement rates.
  • Twitter Ads:
    • The average CPI for Twitter ads is around $0.50 to $1.50, providing a cost-effective option for brands targeting specific demographics.
  • LinkedIn Ads:
    • LinkedIn typically has a higher average CPI of about $3.00 to $5.00, reflecting its professional audience and the competitive nature of B2B advertising.

Industry-Specific CPI Benchmarks

  • Retail:
    • Retail brands often see CPIs ranging from $0.30 to $1.00, driven by frequent promotions and broad audience appeal.
  • Technology:
    • Technology companies may experience higher CPIs, averaging between $1.00 to $2.00, due to competitive bidding for targeted audiences with high purchasing power.
  • Healthcare:
    • Healthcare advertising typically sees CPIs around $0.50 to $1.50, reflecting the sensitive nature of the content and the need for targeted messaging.
  • Travel and Hospitality:
    • Travel campaigns can achieve lower CPIs, often ranging from $0.20 to $0.80, especially during off-peak seasons when competition is lower.
Contact us at [email protected] for a full list of sources.
Find a marketing consultant
Marketing analysis template: concise framework showing market research, customer insights, competitor review, SWOT factors, and growth opportunity analysis.
Table of Contents