What are CPMs?
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Plain language explainers to help you keep up with the evolving digital landscape.

CPM (Cost per mille)

What is cost per mille (CPM)? In Latin, the word mille translates to “thousand.” For advertisers who have been measuring modern mass media audiences across TV, radio, out of home, and online, CPM represents the price an advertiser pays for showing their ad to a thousand people. It’s among the most basic pricing models for determining the value of an ad’s reach.

How do CPMs work? This typically budget-friendly advertising method where you pay for a specific number of ad views, making it cost-effective for businesses of all sizes. You can use the data from these views to improve your campaign performance without spending a great deal more.

Types of CPMs:

  • Target CPM: This is the maximum amount an advertiser is willing to pay for 1,000 impressions.
  • Actual CPM: This is the average amount an advertiser pays for 1,000 impressions.

How to measure CPMs: This metric is based on dividing the total cost of a campaign by the number of impressions generated and multiplying by 1,000. For example, if a campaign costs $10,000 and generates 100,000 impressions, the CPM would be $100.

Why are CPMs important to marketers?

CPM is important to marketers because it helps measure the reach and visibility of their marketing campaigns, while identifying which ad placements are most effective at reaching their target audience.

Who needs to know what CPMs are:

  • Digital marketing manager
  • Paid search specialist
  • Social media manager
  • Content marketing manager
  • Affiliate manager
  • E-commerce manager
  • Product manager
  • Marketing analyst
  • Brand manager

Use CPM in a sentence: “While I appreciate the cost-effectiveness of CPMs, and I’m generally unsure of the quality of those per-thousand views we’re paying for.”

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