CPM
CPM (cost per mille, sometimes cost per thousand) is a metric in online advertising expressing the price for a thousand ad impressions. Put simply, it is the amount an advertiser pays to have their ad displayed a thousand times.
CPM is a key indicator for advertisers because it helps them:
- Plan the budget: thanks to CPM, advertisers know how much they will pay to reach a given number of impressions.
- Compare effectiveness: CPM lets advertisers compare the prices of different advertising platforms and formats.
- Optimise campaigns: advertisers find out which campaigns deliver the most impressions at the lowest price.
How do you calculate CPM?
CPM is calculated with the following formula:
CPM = (campaign cost / number of impressions) * 1000
Practical example
If an advertiser pays €100 for a campaign and their ad is shown 20,000 times, CPM is calculated as follows:
CPM = (€100 / 20,000) * 1000 = €5
That means the advertiser pays €5 for every thousand impressions of their ad.
CPM suits campaigns whose goal is to:
- Raise brand awareness: the more people see the ad, the better they remember the brand.
- Reach a broad audience: CPM makes it possible to reach many people for a relatively low price.
- Promote a new product or service: advertising with a high CPM helps spread news quickly.
CPM is an important metric in online advertising, measuring the price per thousand impressions. It is a useful tool for budget planning, comparing effectiveness and optimising campaigns. Bear in mind, though, that CPM does not guarantee conversions and can be inefficient if targeting is wrong.