Cost per thousand impressions (CPM)
Cost per thousand impressions (CPM) is a common metric used in online advertising to measure the cost of reaching one thousand viewers with a particular ad. It is often used to compare the effectiveness and efficiency of different advertising campaigns. CPM is calculated by dividing the total cost of the campaign by the number of impressions (views) and then multiplying by 1000. The formula is as follows:
CPM = (Total Cost / Number of Impressions) * 1000
For example, if an advertiser pays $500 for an ad campaign that receives 100,000 impressions, the CPM would be calculated as follows:
CPM = ($500 / 100,000) * 1000 = $5
This means that the cost per thousand impressions for this campaign is $5. Advertisers can use CPM to evaluate the cost-effectiveness of their advertising efforts and make informed decisions about where to allocate their advertising budget.
Overall, CPM is a useful metric for advertisers to understand how much they are paying to reach their target audience and to compare the costs of different advertising campaigns.