CPM (Cost Per Mille)

CPM, from the Latin "mille" meaning thousand, is the price paid for 1,000 ad impressions. It is calculated as total cost divided by impressions, multiplied by 1,000. Publishers also use it to describe how much ad revenue they earn per 1,000 views.

Why it matters

CPM is the standard metric for awareness campaigns, where you care about reach rather than clicks. It lets you compare the cost of different placements. A low CPM is not automatically good if the audience is irrelevant.

Because you pay for exposure, pair CPM with frequency and reach figures to avoid paying repeatedly to show the same ad to the same small group.

Example

Spend:        $200
Impressions:  80,000
CPM:          200 / 80,000 * 1000 = $2.50

If those impressions get 400 clicks, the CPC is $0.50 and the CTR is 0.5%.

Common mistakes

• Comparing CPMs across formats, such as video and banner, without context.
• Ignoring viewability, as an impression may not have been seen.
• Mixing up CPM (advertiser cost) with RPM (publisher revenue per thousand pageviews).

Related

• CPC
• CTR
• PPC
• Retargeting

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