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What is CPM?
CPM stands for Cost Per Mille, where “mille” is Latin for thousand. In digital advertising, CPM refers to the cost an advertiser pays for 1,000 impressions of their ad.
Here’s how CPM works:
- Impression = when an ad is displayed once to a user.
- So, CPM = (Total Cost ÷ Total Impressions) × 1000
Example:
If you spend $50 and get 10,000 impressions:
CPM is commonly used for:
- Brand awareness campaigns where visibility is more important than clicks or conversions.
- Display ads, video ads, and banner ads.
Pros:
- Great for maximizing exposure.
- Predictable pricing for reaching large audiences.
Cons:
- You’re paying for views, not actions — no guarantee of clicks or sales.
