Cost per mille (CPM), also known as cost per thousand (CPT), is a pricing model that refers to the average cost of 1,000 ad impressions on a specific channel such as a webpage or app. CPM provides a high-level measurement of campaign impressions and is one of many methods used to price paid advertisements. Since it captures exposures, a CPM model may be preferred by advertisers focused on increasing brand recognition and visibility.
While CPM measures the cost of raw impressions, it lacks information about conversion and engagement. This is why terms like effective cost per thousand (eCPM) and cost per thousand viewable impressions (vCPM) exist. Other pricing models used in the paid advertising ecosystem include cost per action (CPA) and cost per click (CPC).
How to calculate CPM
The “mille” in cost per mille is derived from the Latin word for “thousand,” so CPM can be calculated by dividing the total campaign cost by the number of impressions and multiplying by one “mille” (or thousand). For example, if an ad costs $50,000, and that ad receives 10 million impressions, the CPM would be $5.