Cost Per Mille, commonly known as CPM, refers to the cost per 1,000 impressions of an advertisement. It is a standard measure used in advertising to denote the price of 1,000 advertisement impressions on one webpage. It is also referred to as Cost Per Thousand.
To calculate CPM or cost per thousand, divide the total cost of the advertising campaign by the number of impressions (in thousands). This calculation shows how much it costs to reach 1,000 potential customers with an advertisement.
CPM = Total Ad Spend / (Total Impressions / 1,000)
CPM = Total Ad Spend / (Total Impressions / 1,000)
If an advertising campaign costs $200 and generates 50,000 impressions, the CPM would be $4.00.
A 'good' CPM varies by industry and target audience but generally is one that achieves a high number of impressions for a lower cost, reflecting efficient spending.
A 'bad' CPM is one that results in a high cost for few impressions, indicating inefficient ad spending or poor ad placement.
High-quality, engaging ads tend to perform better and can help reduce your CPM by drawing more genuine interest and higher engagement rates.
Ensure your ads reach the appropriate demographic. More targeted advertising often results in higher engagement rates and more efficient use of your ad budget.
Test different ad formats and content to see what works best with your target audience. This can help lower CPM by optimizing ad elements that perform best.
