Cost Per Mille (CPM)

Definition

CPM, or Cost Per Mille, measures the cost of 1,000 ad impressions. “Mille” means thousand in Latin, making CPM a standard way for marketers to gauge how much it costs to get their message in front of a large audience. It’s commonly used for display ads, social media campaigns, and programmatic advertising.

Why It Matters

CPM is essential for understanding the true cost of getting your ads in front of an audience. Unlike cost-per-click, which measures direct interactions, CPM focuses on visibility, showing how many people actually see your message. By tracking this metric, businesses can make smarter budgeting decisions, compare costs across channels, and ensure campaigns reach the right audience efficiently without overspending.

Example

Imagine a fashion retailer launched a display campaign at a CPM of €5. The campaign ended up costing €500 because it had 100,000 impressions. That large number of impressions showed that the brand was exposed to a large audience, even if only a fraction of users clicked on the ad.

Additional Insights

CPM can vary depending on targeting, platform, ad format, and competition. Narrow, highly targeted campaigns often have higher CPMs but reach more relevant audiences, improving ROI. Combining CPM with metrics like click-through rate, conversion rate, and engagement ensures a full picture of performance. Programmatic platforms also allow real-time optimisation to deliver impressions efficiently to the right users.

Bottom Line

To put it in simple and concise terms, CPM is important when it comes to understanding the cost of ad visibility and reach. CPM can be monitored and optimised to help businesses in many ways. This can help to expand brand awareness, make informed media-buying decisions, and maximise the impact of every ad impression.