Pay-per-impression

What is Pay-per-impression?

Pay-per-impression (PPI) is an advertising model where advertisers pay a set amount every time their ad is displayed to a user, regardless of whether the user interacts with it or not. 

Summarise this post with:

It is often used for brand awareness campaigns where the goal is to make people see the brand rather than click on a link or take immediate action.

PPI is particularly common in digital display advertising — banners, video ads, and native ads — where visibility is the primary objective. Instead of focusing on driving immediate conversions, businesses use this model to increase exposure and build familiarity among potential customers.

What is the Purpose of Pay-per-impression?

The purpose of Pay-per-impression (PPI) advertising is:

1. Brand Awareness: PPI advertising can help increase brand awareness by displaying the advertiser’s ad to a large audience.
2. Reach: PPI advertising can reach a large audience, as it can be displayed on multiple websites.
3. Cost-effective: PPI advertising can be cost-effective for businesses with a limited budget, as they only pay for the number of times the ad is displayed.
4. Measurable Results: PPI advertising is trackable, it allows businesses to measure the number of impressions their ads receive.
5. Flexibility: PPI advertising allows businesses to choose the websites on which their ads will be displayed.
6. Targeting: PPI advertising allows businesses to target specific demographics and geographic regions, which increases the chances of reaching their desired audience.
7. Cost Predictability: PPI advertising allows businesses to predict and control their advertising costs, as they only pay for the number of times the ad is displayed.
8. Cost-effective way to reach a large audience: PPI advertising is a cost-effective way to reach a large audience, as the advertiser only pays for the number of times the ad is displayed, regardless of whether the ad is clicked on or not.

What are the different types of Pay-per-impression?

There are several different types of Pay-per-impression (PPI) advertising, some of the common types include:

1. CPM (cost per thousand impressions): This is the most common form of PPI advertising, where the advertiser pays for every thousand impressions of their ad.
2. CPD (cost per day): This type of PPI advertising is based on the number of days the ad is displayed, the advertiser pays a fixed amount for each day the ad is displayed.
3. CPC (cost per click): This type of PPI advertising is based on the number of clicks the ad receives, the advertiser pays a fixed amount for each click.
4. CPA (cost per action): This type of PPI advertising is based on the number of actions taken on the ad, such as sign-ups, form submissions or purchases.
5. CPV (cost per view): This type of PPI advertising is based on the number of views the ad receives. It’s commonly used in video advertising.
6. CPE (cost per engagement): This type of PPI advertising is based on the level of engagement the ad receives, such as likes, shares, comments, or any other form of engagement.

Pay-per-impression vs pay-per-Click

While both Pay-per-Impression (PPI) and Pay-per-Click (PPC) are popular digital advertising models, they serve different purposes:

Basis	Pay-per-Impression (PPI)	Pay-per-Click (PPC)
What you pay for	Each time the ad is viewed	Each time the ad is clicked
Objective	Brand awareness and visibility	Drive specific actions like website visits or sales
When charges apply	When ad is shown (even if user doesn’t interact)	Only when user clicks on the ad
Best suited for	New brands, product launches, awareness campaigns	Direct response campaigns, lead generation
Risk factor	Higher if impressions don’t lead to engagement	Lower since you’re paying for real clicks

How do we calculate PPI?

PPI isn’t complicated to calculate, but understanding it properly helps in planning budgets and measuring cost-effectiveness.

Usually, pricing under PPI is based on a cost per thousand impressions model (called CPM — Cost Per Mille). Here’s how you calculate it:

Formula: Cost per Impression = Total Advertising Cost/Total Number of Impressions

Example Calculation:

• Suppose you spend ₹5,000 and your ad receives 100,000 impressions.
• Then,
  

Cost per Impression = ₹5000/100,000 = ₹0.05 per impression

It’s important to note:

• Most platforms (like Google, Facebook, LinkedIn) will show costs in terms of CPM (cost per 1,000 impressions) rather than per single impression.
• Therefore, multiply the single impression cost by 1,000 to understand your CPM if needed.

Pay-per-impression vs CPM

Many people confuse Pay-per-Impression (PPI) with Cost per Mille (CPM). While they are closely related, they are not exactly the same:

Aspect	Pay-per-Impression (PPI)	Cost per Mille (CPM)
Focus	Paying for each individual impression	Paying for every 1,000 impressions
Usage	Used in billing models that charge per view	A metric to understand how much 1,000 views cost
Calculation	Based on single unit	Based on sets of 1,000

Platforms typically charge using CPM even if the underlying model is technically PPI. So, while your ad shows and you pay for every impression, billing is grouped into chunks of 1,000 impressions.

Pay-per-impression example

To make it easier, here’s a real-world example:

Imagine a startup launching a new app. They want people to see their brand logo and app features but don’t necessarily expect users to download it immediately.

They set up a Pay-per-Impression campaign on Instagram:

• Budget: ₹10,000
• Cost per 1,000 impressions (CPM): ₹100
• Expected impressions:

₹10,000​/₹100 =100 batches of 1,000 impressions=100,000 total impressions

Result: Their ad is seen 100,000 times by users. Whether people click or not doesn’t matter; they have achieved significant brand exposure through the PPI model.