The cost per impression (CPI) is used in marketing to know how much the company would pay for the times people have seen their advertisement. This is largely used in traditional marketing such as television and billboard ads as well as advertisements on websites. Especially those with high traffic.
Firstly, impression in CPI refers to the time an ad is exposed to a person. In web advertisements, this is simply the one time an ad is shown to a user. They don’t have to click on it or read more. In out-of-home (OOH) and TV advertisements, an impression is simply a time a person has seen the advertisement.
Websites can have the data to know how many users saw the ads while OOH ads like billboard owners have estimated data of how many people pass by their advertisement space daily. This data is used to divide the amount paid to get the cost per impression.
CPI helps chief marketing officers and marketing managers to decide whether the promotional campaign is reaching enough people to justify the incur in expenses. Therefore, you would want your CPI to be as low as possible.