Cost Per Thousand (CPM)

Date created: Mar 1, 2019  •   Last updated: Dec 2, 2020

What is Cost Per Thousand?

Cost Per Thousand (CPM), 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

Formula

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

How to calculate

If an online advertiser pays a website $500 that ultimately generates 150,000 impressions, then the CPM would be $500/150,000 X 1,000 = $3.33. Alternatively, if a website charges $2.00 CPM, an advertiser with a budget of $1,000 per month, will get 500K impressions for their ad each month.

Cost Per Thousand

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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 impressions 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.