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Is it possible to create a smart contract that could initiate functions based on variables set in Google Tag Manager?
For instance, I would like to set up a mechanism in my blog for authors to receive an allocation of coins based on CPM. So, for every 1,000 impressions an article in the blog receives the author is issued with an amount of pre-determined coin as payment.

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You can't do this entirely on-chain (since Google's Tag Manager is not on-chain). There are oracle services (e.g. Oraclize) that allow you to look up data off-chain and have it sent back (by the Oracle) to the chain and a callback triggered in your contract.

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