CPM in email marketing: What it is and how to calculate it

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Tracking CPM email marketing is essential for marketers looking to measure and optimize campaign performance.  

This approach can also help you manage your budget effectively and ensure that your campaigns remain cost-effective. 

In this post, we’ll explore what CPM in email marketing is, examine the average CPM for email marketing, and provide a step-by-step guide on how to calculate it. 

Additionally, we’ll compare email CPM with other pricing models, examine the factors that influence email marketing CPM rates, and share tips for optimizing it.

Lastly, we’ll address common challenges marketers face when measuring CPM. By the end of this article, you’ll be better equipped to refine your campaigns.

What is CPM in email marketing?

CPM or cost per mille is the cost an advertiser pays to send emails to a thousand email recipients. CPM email marketing is a common pricing model, allowing you to gauge how well your email marketing efforts extend your reach. Email CPM pricing is affected by server costs, delivery infrastructure, email volume, and other factors.

What is the average CPM for email marketing

The average CPM for email marketing ranges between $15 and $50 per 1,000 impressions. However, it can vary significantly depending on the industry, audience, and campaign specifics. 

For instance, highly competitive sectors like technology, finance, or healthcare may have email marketing CPM rates closer to $50 or higher. Less competitive industries like non-profits or education may have $15-$30 CPM rates. 

Audience type also affects CPM email marketing rates. Campaigns targeting niche or high-value audiences, such as C-suite executives or luxury buyers, typically have higher CPMs due to their increased demand. Similarly, campaigns aimed toward a broader, less specialized audience often have lower CPMs.

With these benchmarks, marketers can set realistic expectations for their email campaigns. For example, if a campaign targets a competitive industry or a premium audience, marketers should anticipate higher email marketing CPM rates and set their budgets accordingly.

How to calculate CPM for emails

Calculating CPM for email marketing campaigns is easy once you understand the basic formula on which the email CPM calculator works. It takes your total campaign cost and the number of emails sent.

Here’s the standard formula to calculate CPM email marketing:

Let’s walk through a practical example of a small business:

Suppose you run a local flower shop and spend $500 on your monthly email newsletter campaign, sending to 10,000 subscribers. Here’s how to calculate your newsletter CPM:

1. Identify your total campaign cost: $500 
2. Count your total impressions: Impressions refer to the number of recipients who received your email, which is 10,000 for this campaign
3. Divide the total cost by the impressions: $500 ÷ 10,000 = $0.05
4. Multiply by 1,000: $0.05 × 1,000 = $50

In this example, your newsletter CPM is $50, meaning you spent $50 to reach 1,000 recipients.

To put this in perspective, if you want to estimate costs for future campaigns, simply reverse the formula:

Total campaign cost = (CPM × Number of Emails) ÷ 1,000

So, if you plan to send to 20,000 subscribers next month with the same CPM, it would look like this: 

Total cost = ($50 × 20,000) ÷ 1,000 = $1,000

CPM vs. other pricing models in email marketing

CPM is a popular pricing model for email marketing. Still, businesses and marketers must understand how it compares to other options like CPC and CPA. Let’s compare these common pricing models, along with their pros and cons:

CPM (cost per mille)

In this model, advertisers pay based on the number of email recipients (impressions) reached, regardless of whether they open or engage with the email. As a result, CPM is used in campaigns to prioritize visibility and brand awareness over direct interactions.

It works best if you have a large, engaged email list or if you need predictable pricing. 

CPC (cost per click)

With this model, you’re only charged when a recipient clicks on a link within the email. It’s ideal for campaigns aimed at driving traffic to a website or specific landing page.

CPA (cost per acquisition)

In this pricing model, you pay only when a recipient takes a specific action, such as making a purchase, signing up, or downloading a resource. It provides a direct connection between ad spend and email marketing return on investment (ROI).

Here’s a comparison between CPM vs. other pricing models:

Pricing model	Pros	Cons
CPM	— Cost-effective for large-scale reach — Ideal for brand awareness — Simple to calculate and track spending	— Cost remains the same for both engaged and unengaged subscribers — Can be expensive if you have a list with low engagement
CPC	— Ensures some level of engagement — More control over marketing spend — Easier to measure campaign effectiveness	— May become expensive with high click-through rates — Requires compelling CTAs
CPA	— Lower risk because you’re only paying for conversions — Directly tied to ROI — Guarantees payment for successful conversions	— Higher cost per action — Requires advanced tracking mechanisms

Factors affecting CPM rates in email marketing

Several factors influence CPM email marketing rates, including target audience and campaign goals. To improve campaign performance, you must understand these factors. 

Here are the key factors and actionable insights for maximizing campaign costs:

1. Audience segmentation 

Targeted campaigns usually have higher CPM rates because of the greater effort involved in reaching niche audiences. However, segmentation improves relevance and engagement, which can result in higher ROI. 

You can use demographic, behavioral, or purchase history data to create highly targeted email lists and ensure the relevance of your message.

2. Email design

Visually appealing email designs justify higher CPM rates by increasing engagement. Alternatively, poorly designed emails lead to lower engagement and conversions.

Invest in professional email templates, clear CTAs, and compelling visuals to capture attention and drive action.

3. Deliverability rates

High deliverability ensures your emails reach your audience’s inbox rather than their spam folders. This directly impacts the value of your CPM. Meanwhile, emails with poor deliverability may result in wasted ad spend. 

To improve deliverability, maintain a clean email list, avoid spam triggers, and implement authentication protocols like SPF and DKIM.

4. Campaign targeting

The specificity of your targeting can impact CPM rates. CPM costs will be higher if your email marketing campaign focuses on highly competitive audiences, such as executives or high-income groups. 

It’s important to align your campaign goals with your audience’s value to balance precise targeting with reaching a wider group.

How to optimize CPM for better ROI

Email marketing success isn’t just about reach. It’s also about efficiency and delivering the desired ROI. A closer look at your CPM can help you pinpoint ways to enhance campaign performance and achieve your marketing goals. 

Below, we discuss actionable strategies to reduce CPM costs, along with practical examples:

Improve email list quality 

A high-quality email list ensures your message reaches an engaged audience, reducing wasted impressions. This is why you must regularly remove inactive subscribers, invalid email addresses, and spam traps. You should also implement double opt-in to ensure subscribers are genuinely interested in your brand. 

Example 

Ego, a female shoe and fashion retailer, faced deliverability issues and a decline in customer engagement due to outdated and invalid email addresses on its mailing list. It partnered with Kickbox, an email verification tool, to clean its list and remove invalid emails and spam traps. 

After the cleanup, Ego saw open rates increase by 15%, while its bounce rate dropped to less than 1%. This improvement in email list quality resulted in better campaign performance, reduced wasted impressions, and a lower CPM. 

Optimize subject line

A compelling subject line can improve open rates and engagement. Use clear, concise language, create a sense of urgency (where appropriate), and personalize emails when possible. Also, try different variations of subject lines using A/B testing to find the most effective option.

Example

Mockingbird Marketing conducted A/B testing to compare the performance of generic versus specific subject lines for its email newsletters. The generic subject line, “Mockingbird Marketing: From Around the Blog,” had a lower open rate compared to the more specific subject line, “When We’re Happy to See Clients Go.”

On average, the company saw a 2.18% increase in open rates when it switched to specific, actionable language in its subject lines. Aside from boosting email engagement, this improvement reduced CPM by ensuring more recipients opened and interacted with the emails. 

Refine targeting

Instead of a broad, untargeted email blast, focus on reaching the most relevant audience for your campaign. Segment your audience based on demographics, purchase history, website behavior, or other relevant criteria. While narrow targeting may increase CPM slightly, it ensures your message resonates with recipients.

Example

Doggyloot, a flash sale site for pet products, refined its email targeting by segmenting customers based on the size of their dog (small, medium, or large). To collect this information, the company incentivized its email subscribers to share their dog’s size and birthday. This data allowed Doggyloot to send personalized campaigns tailored to each segment.

The results were impressive:

• Open rates increased by 10.2%
• Click-through rates rose by 410%
• Segmented campaigns contributed up to 13% of daily revenue

Additionally, Doggyloot leveraged the data to send birthday emails to its subscribers’ dogs. This triggered campaign was even more successful:

• Open rates increased by 28.1%
• Click-through rates skyrocketed by 750%
• Birthday emails accounted for 16% of daily revenue

This case study demonstrates how segmentation and email automation can significantly improve engagement and conversions.

Challenges of using CPM in email marketing

While CPM is a popular pricing model in email marketing, it comes with several challenges that marketers must navigate to maximize its effectiveness. Here are the key obstacles and tips to overcome them:

Fluctuating costs 

CPM rates can vary depending on factors like audience segmentation and email platform fees. This unpredictability can make budgeting more difficult.

How to overcome

Plan campaigns during less competitive periods and negotiate rates with email service providers when possible. Additionally, monitor historical CPM trends to predict and allocate budgets effectively.

Lack of guaranteed engagement

Since CPM is based on impressions, there’s no guarantee that recipients will open or engage with the email. This can make it harder to justify costs if campaigns underperform.

How to overcome

Improve open and click-through rates by using attention-grabbing subject lines, personalization, and engaging email designs. Also, A/B-test various email elements to see which options perform better. 

Reliance on deliverability metrics

The success of CPM campaigns depends mainly on deliverability. If emails fail to reach inboxes and end up in spam folders, this leads to wasted impressions that drive up your marketing costs. 

How to overcome

Maintain a clean and engaged email list, authenticate your email domain, and monitor sender reputation to ensure high deliverability.

Conclusion

CPM in email marketing remains a fundamental metric for measuring and managing campaign costs effectively. While it presents challenges like fluctuating costs and engagement, understanding how to calculate and optimize your email CPM is crucial for email marketing success. 

As discussed, smart CPM management strategies like cleaning your email list, personalizing content, and refining campaign designs can improve engagement, reduce CPM costs, and increase ROI. By optimizing CPM, you can ensure every dollar spent works hard to deliver results and expand your brand’s reach.

Remember that CPM is just one piece of the email marketing puzzle. Using a tool like Omnisend, you can easily combine CPM with other email marketing metrics and pricing models and ensure you always align your pricing strategy with your campaign objectives.