What is CPM in Marketing and Advertising?

CPM stands for Cost Per Mille and it stands for your average cost per 1,000 ad impressions. ‘Mille’ is a latin word that means thousand. CPM is a metric that advertisers use to know how much they are paying for impressions. CPM will vary for every advertising platform depending on who you are targeting and your goals.

CPM Video Explanation

 


 

How to Calculate CPM:

CPM = (Impressions/1000)/Cost

In order to calculate CPM, you need to first take your total impressions and divide that number by 1,000. Then, you need to divide by the total cost of your campaign. For example, if 10,000 impressions cost me $20, then my CPM would be $2.00.

You can see sample data below from a campaign, which shows the impressions, costs, and Avg. CPM.

sample cpm advertising


 

What is a Good CPM in Advertising?

Generally, a CPM under $2 would be cost-effective and efficient for an Advertising campaign. However, if your goal is to drive conversions at the lowest cost per conversion, you should not focus on your CPM.

What is the Average CPM for Advertising Campaigns?

The average CPM can vary based on the ad network, industry, ad type, and where your ad is shown. Premium placements mean a more expensive CPM, which can range from $15-$45 per 1,000 ad impressions. On average, advertisers usually pay a CPM between $5-$10 per 1,000 ad impressions. The average CPM that I use when I am calculating estimates is $7.50 per one thousand impressions.

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