What is CPM?
Definition: CPM is an acronym for "Cost Per Mille" or "Cost Per Thousand." It is a common advertising metric that represents the cost of delivering an ad to 1,000 people, regardless of whether they actually saw or engaged with the ad.
CPM is the most common method of ad pricing, and marketers use it to determine the cost efficiency and ROI of different advertising channels or campaigns. This allows advertisers to determine the most cost-effective way to reach their target audience.
For example, if an advertiser runs a display ad campaign with a CPM of $5, it means that for every 1,000 times the ad is shown to people, the advertiser pays $5.
CPM vs. CPC and CPA
CPM (Cost Per Mille) measures the cost of an ad regardless of engagement. You pay for every 1,000 people that see your ad.
CPC (Cost Per Click) measures the cost of a single click on an ad and it is used for pay-per-click (PPC) campaigns. You only pay each time a user clicks on their ad.
CPA (Cost Per Action) is used for performance-based advertising and it measures the cost of a specific desired action taken by a user, such as making a purchase, filling out a form, or signing up for a newsletter.
How to Calculate CPM?
CPM = ( Ad spend / Impressions ) x 1000