What is CPM and how do we calculate it?
CPM is “cost per mille” and it is a representer of a measuring system to an advertising method of exposures. The term is representing the cost or the value of a 1000 impressions, how much does 1000 repetitions of the ad will cost me.
The term have different names and can also be called CPT (cost per thousand) as the word “mille” is a thousand in Latin or PPC (pay per mille) as it reflects the same meaning from a different angle.
CPM is one of the first measurements of advertising and is used in many mediums such as TV, newspapers ans of course the on line advertising. More new ways of measuring advertising are CPC (cost per click) as it check the price or value of a visitor, it is not enough to see the add you have to click on it to be considered as a visitor. CPA (cost per action) is a general term for all the actions a visitor can do for the advertiser, starting from leaving his details (CPL -cost per lead) and till buying something (CPS- cost per sale).
let’s see a few examples of CPM:
I paid for a banner on a site to a period of 1 month, the price was $300. My banner was shown 100,000 times.
100,000= 100K
I paid $300 for 100 units of K (a thousand impressions)
My CPM was $3, for every 1000 times my banner was shown I paid $3
Another example can come from the other hand,
I was offer a banner at a site for the price of $12 CPM, my badget is $240, how many impressions can I get?
240/12=20 , that means I can get 20 units of a thousand impressions or 20k or 20,000 impressions. My banner is going to be shown 20,000 times on this price with my budget.
If you would like to read more about what is CPM please go read our articles.
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