What is CPM?

Understanding Cost per Mille in digital advertising

Quick Answer:

CPM (Cost per Mille) is the amount you pay for 1,000 ad impressions. "Mille" means thousand in Latin, making CPM literally "cost per thousand impressions."

Detailed Explanation

CPM is one of the most fundamental metrics in digital advertising. It represents the cost an advertiser pays for one thousand impressions of their advertisement. An impression occurs each time an ad is displayed to a user, regardless of whether they interact with it or not.

How CPM Works

When you run a CPM-based advertising campaign, you're essentially buying visibility. You pay a fixed rate for every 1,000 times your ad is shown to users. This model is particularly effective for brand awareness campaigns where the goal is to reach as many people as possible.

CPM Formula:

CPM = (Total Cost ÷ Total Impressions) × 1,000

Example: If you spend $500 and get 100,000 impressions, your CPM is ($500 ÷ 100,000) × 1,000 = $5.00

When to Use CPM

  • Brand Awareness: When you want to increase visibility and reach
  • New Product Launches: To introduce products to a wide audience
  • Video Campaigns: Especially for brand storytelling
  • Display Advertising: Banner ads and visual campaigns
  • Social Media Branding: Building brand recognition on platforms

CPM vs Other Metrics

CPM vs CPC

CPM focuses on impressions (visibility), while CPC focuses on clicks (engagement). Use CPM for awareness, CPC for direct response.

CPM vs CPA

CPM pays for views, CPA pays for actions (conversions). CPM is top-funnel, CPA is bottom-funnel marketing.

Industry Benchmarks

Google Display

$2.80

Average CPM

Facebook Ads

$7.19

Average CPM

YouTube Ads

$9.68

Average CPM

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