Cost Per Thousand (CPM)

What is Cost Per Thousand?

Cost per thousand, also called cost per mille, is a marketing term used to describe the price of 1,000 advertisement impressions on an advertiser's webpage. If a website publisher charges $2.00 CPM, that means an advertiser must pay $2.00 for every 1,000 impressions of its ad. The "M" in CPM represents the word "mille," which is Latin for "thousands."
Alternate names: Cost Per Mille, Cost Per Thousand Impressions

How to calculate Cost Per Thousand

ƒ Sum(Ad Costs) / Count(Ad Impressions) X 1000

Level of complexity

Beginner

Date created: Mar 01, 2019

Latest update: Apr 17, 2019

Tell me more about this metric

CPM is the most common method for pricing web ads. It's the cost a company has to pay for every 1,000 impression it gets on a webpage they are advertising for. One impression is equal to a potential customer viewing an ad.

The cost will differ depending on the popularity of the keyword they wish to advertise and the site the advertiser is choosing to advertise on.

Example

An online advertiser pays a website $500 that ultimately generates 150,000 impressions. The Cost Per Thousand would be $500/150,000 X 1,000 = $3.33.

Alternatively, a website charges $2 CPM. Ad advertiser with a budget of $1,000 per month, will get 500K impressions for their ad each month.

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