What is a CPM for Email Ads? [Free Calculator] (2024)

A ‘CPM‘ for email ads means ‘Cost Per Thousand Impressions.” Impressions are commonly known as views or unique opens.

You can use CPM to judge if an email sponsorship or advertising opportunity is expensive, cheap, or just right. CPM pricing structures are also used for influencer advertising like social media.

To understand how many thousand impressions are in a list, divide the total number of subscribers by 1,000. For example, if you send a newsletter to ten thousand people, you have ten thousand impressions (10,000 / 1000 = 10). If this example was charging a CPM of $15, you will pay 10*15 or $150 per send.

How much is a typical email newsletter’s CPM?

At Paved, we’ve found that a CPM for a healthy newsletter is somewhere between $15 and $30. In rare instances when a newsletter has an extremely valuable audience (like one who regularly purchases luxury goods), CPM may increase into the $100+ range.

How do I use a CPM to judge the value of a sponsorship?

The most important thing to remember when looking at an email newsletter sponsorship fee is that CPM does not indicate performance.

CPM covers all possible impressions. It’snot a reflection of the number of people your ad will reach. CPM shows the potential number of times your ad could be served. That’s why stats like open rate and click-through rate are also important. You need them to judge the actual cost of sponsorships.

Try the calculator below to see how your cost per actual view changes even if the CPM stays the same:

What are good newsletter stats, anyway?

In an industry newsletter report from Mailchimp, researchers found that with an open rate above 10% is well above average. If you’re dealing with interest-based newsletters, you should expect stats like the following:

• Open rate between 25% and 40%
• Click-through rate (CTR) between 2% and 5%
• Unsubscribes around or under 0.1%
• All subscribers should be opted in to receive emails.

Why CPM is more expensive than calculating based on email performance stats

Let’s say there are two newsletters with the same CPM of $15. Newsletter A 10% open rate, and Newsletter B has a 40% open rate. The difference between the open rates dramatically changes your cost per view. While two newsletters might look similar in price, you’d effectively pay 4x more per impression for Newsletter A.

Not good.

There are two ways to figure out how effective your sponsorship might be.

1. “Effective CPM” (also known as eCPM):
   It is predominantly used in programmatic advertising or performance-based pricing. eCPM is best used for tracked ads that are paid after the sponsorship. With most newsletters requesting payment upfront, it’s not a viable option.
2. Audience value:
   At Paved, we use a few metrics to calculate fair base pricing:
   • Audience value
     (how much a particular audience is worth at the current time)
   • eCPM (number of opens)
   • Influence potential (in short, this is brand value.)
     Newsletters with fantastic brand value–think Product Hunt or TechCrunch— or above-average engagement and clicks–think Morning Brew and The Hustle–command much higher rates.

Is CPM alone effective for pricing email ads?

Because CPM relies on email open rates for its calculations, it’s not a perfect metric for everyone.

Why? If you’re in the email marketing business, you’ve probably heard of Apple’s Email Privacy Protection update. The update included enhanced privacy features that rendered open tracking inaccurate.

Here at Paved, we’ve noticed that over 50% of impressions on our Ad Network come from automated click activity on Apple servers.

This is why sponsors need to examine different metrics like clicks to accurately judge the value of a sponsorship opportunity and avoid paying for automated opens.

How to tell if a newsletter is going to perform before buying a sponsorship?

Disclaimer: There is no surefire way of judging how an audience will react to your ad. The following information is advice based on our personal experience running thousands of email ads a year.

Let’s take a look at two example newsletters. We’ll call them Abacus Weekly and Bartimus Times. Both newsletters have a modest general-interest audience of 10k subscribers and charge a CPM of $15 which works out to $150 per sponsorship.

From the table above, we can see that Bartimus Times will get us almost double the number of impressions and 1.25x the number of clicks.

So, an ad on Bartimus Times is worth more than Abacus Weekly. If you were looking to sponsor a newsletter, Bartimus Times is probably going to get you better results.

A better system than CPM to work out the true value of email ads

A hybrid system that combines opens and the number of clicks is the method we’ve come to rely on most.

Here’s the formula:

Open Rate / 100 * Number of Subscribers = Total opens

Total Opens * cost per impression + Number of clicks * cost per click = Sponsorship Fee

So for example, let’s say a click was worth $4 due to a valuable audience, and an impression was worth $0.01.

Abacus’s Weekly sponsorship fee

25/100 * 10000 * 0.01 + (20*4) = $105

Bartimus Times sponsorship fee

40/100 * 10000 * 0.01 + (25*4) = $140

Here’s a quick calculator so you can see how it works for yourself.

For brand awareness: focus on an email’s open rate

The more people see the ad, the better. Newsletters that perform well on brand awareness have an open rate above 30% and a good brand name. These newsletters also tend to perform poorly on clicks in comparison to the cost of sponsorship. They focus on brand alignment instead of instant ROI.

For conversions: focus on the number of clicks a newsletter receives

Most newsletters consider the click-through rate (CTR) to be the total number of clicks a typical send gets.

The CTR is a good performance metric but it doesn’t give you insight into the number of clicks an ad gets.

Factors that influence ad clicks are:

• Positioning of ad
• Number of other links in the email
• Number of other advertisers in the email
• Quality of the ad copy and creative

Let’s go back to the Abacus Weekly and Bartimus Times example.

Above, we’ve introduced a new metric. The ad CTR. You should always ask publishers for their average ad CTR if you want an accurate expectation of performance.

Can I pay per click on newsletters?

No. Not unless you use programmatic advertising solutions or a custom CPA-model with a publisher.

However, you can calculate a rough estimate of what you will be paying per click.

We find most newsletter sponsorship prices work out between $1 and $5 CPC (cost per click). You can research how much people are paying for your target audience by checking out other social media CPC plans.

According to WebFX, Facebookcharges an average of $0.97 and LinkedIn is around $5.26. In a quick study Paved completed in 2020, we found that LinkedIn charges up to $33 per click for high-value audiences. You can get the full breakdown here.

How to find newsletters and book email ads

There are plenty of ways to find newsletters online. However, if you’re looking for a centralized marketplace with 1300+ newsletters and an engaged audience of 253 million people, we’ve got you covered.

Paved streamlines the entire newsletter sponsorship process. If email ads are something you want to do more of, join the Paved Marketplace to find hundreds of publishers across all categories.