Email Marketing CPM Demystified: Everything You Need to Know

Have you ever seen an email with a big, flashy banner ad at the top and wondered how much that company paid to have its ad placed there? (Or how you can put that money into your own pocket?) The answer depends on the email marketing CPM.

But what is a CPM rate? What should yours be? And how does that compare to those set by other creators?

So glad you asked.

What Is CPM Email Marketing?

In CPM email marketing, companies pay for email advertising based on what's called a Cost-per-Mille, or CPM. "Mille" is the Latin for thousand, and CPM is the cost per thousand impressions or views.

To put it another way, the CPM is the price an advertiser pays for their ad to be shown 1,000 times as people engage with online content.

What Is $3.50 CPM?

Let's put numbers to this idea. Company X wants to advertise in Creator Y's newsletter. Creator Y has a list of 10,000 subscribers and charges a CPM of $3.50. Multiply that cost by the number of subscribers/1,000 to find the amount Company X needs to pay Creator Y to feature its ad in an issue: $35.

(Frankly, I think Creator Y can do better. Their audience is incredibly engaged, and their most popular features are high-end product reviews and roundups. Their readers come to them in search of the best places to spend their money.)

What Is the Average CPM for Ads?

CPM is a fairly common pricing structure across digital channels. CPM rates vary across industries, platforms, locations, target audiences, and more. Generally speaking, an average CPM lies between $3-10 USD.

By channel, the average CPMs in 2021 were:

• Google Search Ads: $38.40

• Pinterest Ads: $30

• Instagram Ads: $8.96

• Facebook Ads: $8.60

• LinkedIn Ads: $6.59

• Twitter Ads: $6.46

• Google Display Ads: $3.12

The price of advertising can also fluctuate throughout the year. Across a year-long period starting in the third quarter of 2021, the average CPM for social media varied from $8.15 to $10.52. Those prices were highest in the last few months of the year as advertisers tried to grab their share of holiday purchases.

What Is the Average CPM for Email Marketing?

It varies. And unlike other channels for CPM marketing, it's difficult to aggregate data across platforms and publications. Some people also blur the distinction between dedicated email marketing (direct emails sent by a brand as part of a campaign for that brand) and marketing in email publications such as newsletters. And a lot of smaller brands opt for flat fees instead of CPMs.

Not happy with that non-answer? I've seen estimated averages that range from $3-15, and certain niches can go higher. These numbers come from online forums, newsletter services, marketing websites, etc. — and none of them can be cited as a definitive authority. (Sorry.)

How Do You Calculate CPM for Emails?

Let's say that you prefer to go with flat fees instead of charging sponsors a CPM rate. How can you translate this into email marketing CPM?

Simply divide the fee you charge by your total number of subscribers. That's the average cost per email subscriber.

Now multiply that number by 1,000 to find the CPM.

What if you want to know the CPM for a business's own email marketing campaign? Tally all associated costs with the campaign, such as list rental fees, hours logged, and creative expenses. Then divide that number by the total number of emails on the list used and multiply by 1,000.

What Is a Good ROI for Email Marketing?

As in any other kind of marketing, getting a good return on investment (ROI) is essential for success. But what does a good ROI for a sponsor actually look like?

Another difficult question to answer. An often-cited number is email marketing's 3600% ROI — for each dollar spent, you receive a return of $36. However, like most email marketing statistics, this number represents direct brand-to-subscriber communications. It doesn't cover newsletter sponsorships.

A more relevant number might be the average ROI for social media marketing: 280%. But there are problems with that analogy, too.

Ultimately, it will be up to you to figure out the ROI you can offer potential advertisers. Consider factors such as open rates and ad click-through rates (CTRs) in addition to total subscribers. And remind them that they will also receive indirect returns in the form of heightened brand awareness and positioning.

How Do You Price an Email Ad?

Yet another good question. (You're really on a roll, here.) There are many factors that influence newsletter ad prices.

In figuring out how to set your own rate, start by taking a hard look at your key metrics. The goal is to put numbers to the value you can offer sponsors. In addition, consider factors such as niche saturation, reader intent, and audience demographics.

Remember that there are also other kinds of email newsletter sponsorships. Cash is nice, but it's not the only possible compensation a business might offer you.

How Can You Get Started With Newsletter Sponsorships?

There you have it — email marketing CPM demystified. You can tuck the term into your pouch of marketing acronyms.

You have multiple options to monetize your newsletter, and the use of well-placed advertisements can be profitable for both you and your sponsors. Take a look at beehiiv's guide to finding and contacting potential sponsors. It gives you the necessary tips and scripts to start making some money.

Ready for more good news? As part of beehiiv's quest to help creators turn a profit, we launched the beehiiv Ad Network in the fall of 2022. Our goal is to ultimately find the right advertisers for you, letting you focus on delivering the best content you can.

If you're a beehiiv user with a list of at least 1,000 active subscribers and send emails at least once a week, you're eligible to apply for early access to the ad network. Apply today.