What’s a CPM and how to easily price email ads the right way

CPM means ‘Cost Per Thousand Impressions’. It’s what advertisers sometimes use to judge how expensive a campaign is relative to the number of subscribers you have. 

To calculate how many thousand impressions are in your 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). Your total sponsorship fee divided by the number of ten thousand impressions you have is your CPM.

There are two types of Email CPM:

1. Fixed Sponsorship  CPM: You don’t know ahead of time how many people will open. So it’s billed on the total list size.This is the most common type of CPM and but also the most inaccurate way to price your sponsorships.

2. Programmatic CPM (or post pay sponsorships): An advertiser pays after the send so you know exactly how many impressions they received. This is far more beneficial than a fixed sponsorship CPM if your newsletter gets a good open rate. 

How much is a typical newsletter’s CPM?

A CPM for a healthy newsletter is somewhere between $10 and $30. Some newsletters with excellent brand awareness or a highly sought after audience can charge more than this.

But there’s a major flaw in looking at the CPM alone if you want to set your prices accurately.

A good newsletter will have stats in the ballpark of the below:  

  • An open rate ranging above 25%
  • A click-through rate (CTR) above 2%
  • Unsubscribes around or under 0.3%

Mailchimp has put together a great guide for newsletter stats across multiple industries. Just remember that all industry stats include businesses as well as community/interst driven newsletters. A good newsletter should outperform industry stats by a few percentage points.

Note: All subscribers must have all opted in to receive emails. If they didn’t, they can’t be counted as a subscriber, open, or click. 

Why you shouldn’t use a fixed CPM to work out your sponsorship fee

Sadly a fixed CPM doesn’t account for your newsletter performance or all that hard-won community engagement.

Using a performance-based pricing structure requires a little more work, but it pays off in the long run.

Let’s take a look at two example newsletters, Abacus Weekly and Bartimus Times. Both charge $10 per CPM and have 10k subscribers. Their total sponsorship fee is $100. 

But they have totally different performances. Check out the table below. 

  Open Rate CTR
Abacus Weekly 25% 4%
Bartimus Times 40% 5%

Which newsletter is more ‘worth it’ to advertisers?

  Open Rate Total views/impressions CTR Total clicks
Abacus Weekly 25% 2,500 4% 100 clicks
Bartimus Times 40% 4,000 5% 200 clicks

With double the chance of an ad getting clicked, Bartimus Times is the clear winner. If you’re running Bartimus times, you bet you want to charge more than Abacus Weekly! 

A better option than fixed CPMs: Calculating by open and click

People use a fixed CPM because impression tracking is hard with emails. You need to work with unique opens, to prevent the same person being counted multiple times… but if they send the email to 100 friends, it’s still tied to that one unique open. 

That’s why Paved calculates by combining the total number of opens AND the total number of clicks (also known as Ad CTR). 

We break this up into two groups depending on the newsletter and type of advertiser they attract.

Type 1: Brand awareness

Newsletters that get the highest open rate should receive a higher fee. So charge on a Cost per Open basis. For an average audience $0.05 per open is a good benchmark to use.

  Open Rate Total views/impressions Cost per view Total sponsorship fee
Abacus Weekly 25% 2,500 $0.05 $125
Bartimus Times 40% 4,000 $0.05 $200

Type 2: Performance

All newsletters typically consider the click-through rate (CTR) to be the total number of clicks an email gets. But the actual number of clicks an ad gets  (also known as the Ad CTR) will vary considerably. 

At Paved we use the Total CTR as a general indicator of subscriber performance. But we use the Ad CTR to judge the value of a sponsorship or ad.

Factors that influence 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

  Total clicks Number of other links Ad Clicks Ad CTR
Abacus Weekly 100 clicks 5 links 20 ad clicks 20%
Bartimus Times 200 clicks 8 links 25 ad clicks 12.5%

Now these newsletters look a lot closer in actual traffic they send a potential advertiser.

How much to charge per click on newsletters? 

This step requires some research. We find most newsletter sponsorship prices work out between $1 and $5 a click. 

According to WebFX, on average Facebook costs around $0.97 per click while LinkedIn costs $5.26 per click. In our experience, these numbers can quickly increase. Facebook clicks tend to cost us $2 and up while LinkedIn costs one B2B advertiser that we spoke to $25 per click. In a short study, Paved did in 2020, we found that LinkedIn charges up to $33 per click for high-value audiences. You can get the full breakdown here

There’s more to the story than just clicks though. If advertisers on your newsletter get a higher conversion rate than on Facebook, a click could be worth much more. 

For example, if an advertiser gets 20 clicks but only 5 purchases on Facebook, and 20 clicks but 15 purchases from a newsletter ad – the newsletter clicks are far more valuable to them.  

How to work out your sponsorship fee based on performance

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

Let’s say a click was worth $4 due to a valuable audience and an impression was worth $0.01 as performance was our newsletter’s focus.

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

Sponsorships based on performance and audience value rather than a fixed CPM work out in the publisher’s favor. Especially if you have good stats and engagement. 

Try the calculator below to set your sponsorship prices.


Once I set my email ad price how do I find sponsorships? 

There are many ways for newsletters to find sponsorships. Check out these resources to help you get started: 

You can also sign up to Paved’s Marketplace and Ad Network to monetize your newsletter immediately.