CPM (Cost per mille) | CPM (Cost per mille) formula

CPM, or cost per mille, is a pricing model used by advertisers to purchase online advertising space. The term mille is Latin for thousand and refers to the number of impressions or views an ad receives. CPM is calculated by dividing the cost of the ad by the number of impressions.

CPM is a popular pricing model because it allows advertisers to predict their costs and budget accordingly. With CPM, advertisers pay for each impression of the ad, rather than for each click or action, making it ideal for campaigns that focus on building brand awareness.

Advertisers can use CPM to determine which ad campaigns are most effective and which are not. If an ad campaign has a high CPM, it means that the cost per impression is high and that the campaign is not performing as well as expected. Conversely, a low CPM indicates that the campaign is performing well and that the cost per impression is low.

Advertisers can also use CPM to determine the return on investment (ROI) for a particular campaign. By dividing the total cost of the campaign by the total number of impressions, advertisers can calculate the cost per impression and determine the campaign’s overall ROI.

When purchasing online advertising space, advertisers can choose between CPM and other pricing models such as CPC (cost per click) and CPA (cost per action). CPM is best used for campaigns that focus on brand awareness, while CPC and CPA are better suited for campaigns that drive direct sales.

In conclusion, CPM is a popular and effective pricing model used by advertisers to purchase online advertising space. It is ideal for campaigns that focus on building brand awareness and allows advertisers to predict their costs and budget accordingly. Advertisers can also use CPM to determine the ROI of a particular campaign.

CPM (Cost per mille) formula  

CPM = (Advertising Cost / Number of Impressions) x 1000

Example: If an advertiser spends $5000 and receives 1 million impressions, their CPM would be calculated as:

CPM = ($5000 / 1,000,000) x 1000 = $5