Cost per mille

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For CPM related to internet marketing, see Cost per impression

Cost per mille (CPM), also called cost ‰ and cost per thousand (CPT), is a commonly used measurement in advertising. In Latin mille means thousand, therefore, CPM means cost per thousand. Radio, television, newspaper, magazine, Out-of-home advertising and online advertising can be purchased on the basis of what it costs to show the ad to one thousand viewers (CPM). It is used in marketing as a benchmark to calculate the relative cost of an advertising campaign or an ad message in a given medium. Rather than an absolute cost, CPM estimates the cost per 1000 views of the ad.

An example of computing the CPM:

  1. Total cost for running the ad is $15,000.
  2. The total audience is 2,400,000 people.
  3. CPM is calculated as CPM = $15,000/(2,400,000/1000) = $6.25

[edit] Examples

  • In online advertising, if a website sells banner ads for a $20 CPM, that means it costs $20 to show the banner on 1000 page views.
  • While the Super Bowl has the highest per-spot ad cost in the United States, it also has the most television viewers annually. Consequently, its CPM may be comparable to a less expensive spot aired during standard programming. (But the truth is that Super Bowl prices have been as much as double a regular prime-time ad, because advertisers are willing to pay to be part of 'the event' that is the Super Bowl broadcast.)

[edit] Effective cost per mille

Effective cost per mille (eCPM) is used to measure the effectiveness of a publisher's inventory being sold (by the publisher) via a CPA, CPC, or CPT basis. In other words, the eCPM tells the publisher what they would have received if they sold the advertising inventory on a CPM basis (instead of a CPA, CPC, or CPT basis).

[edit] See also