Cost per mille

Cost per mille (CPM), also called cost per thousand (CPT) (in Latin and Italian mille means one thousand), is a commonly used measurement in advertising. It refers to the cost an advertiser pays for one thousand views or impressions of an advertisement.Radio, television, newspaper, magazine, out-of-home advertising, and online advertising can be purchased on the basis of showing the ad to one thousand viewers. It is used in marketing as a benchmarking metric to calculate the relative cost of an advertising campaign or an ad message in a given medium.

The “cost per thousand advertising impressions” metric (CPM) is calculated by dividing the cost of an advertising placement by the number of impressions (expressed in thousands) that it generates. CPM is useful for comparing the relative efficiency of various advertising opportunities or media and in evaluating the overall costs of advertising campaigns.

For media without countable views, CPM reflects the cost per 1000 estimated views of the ad. This traditional form of measuring advertising cost can also be used in tandem with performance based models such as percentage of sale, or cost per acquisition (CPA).

The purpose of the CPM metric is to compare costs of advertising campaigns within and across different media. A typical advertising campaign might try to reach potential consumers in multiple locations and through various media. The cost per thousand impressions (CPM) metric enables marketers to make cost comparisons between these media, both at the planning stage and during reviews of past campaigns.

Marketers calculate CPM by dividing advertising campaign costs by the number of impressions (or opportunities-to-see) that are delivered by each part of the campaign. Thus, CPM is the cost of a media campaign, relative to its success in generating impressions to see. As the impression counts are generally sizeable, marketers customarily work with the CPM impressions. Dividing by 1,000 is an industry standard.

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