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."
How to calculate Cost Per Thousand
ƒ Sum(Ad Costs) / Count(Ad Impressions) X 1000
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.
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.
Metrics related to Cost Per Thousand