The meaning of CPM is a measure used in the field of digital marketing industry referring to the cost per thousand impressions. Advertisers who serve these types of ads set the price they want for every thousand ads published, choosing the specific ad locations where they want their campaigns to appear and pay each time the ad appears visible.
What is the cost per thousand?
For publishers, this will result in a series of revenue to your account each time the CPM ad appears on your page. It must be said that this class of advertisements compete with those of pay per click or CPC in the ad auction, publishing only those that provide the highest performance.
CPM ads can be text or graphic, and they're always placement-targeted. Text ads are expanded to fill the entire ad block.
In the CPM system in digital marketing, the advertiser pays every time their ad is seen, regardless of whether the user clicks on it or not. It is counted for every thousand pages served on the site where the advertising has been contracted. This implies, therefore, that at a CPM of 30 euros we will pay 30 euros for every thousand pages served or views in the established format, either button, page stealer, banner, etc. Therefore, the cost for each impression or display will rise to 0,03 euros.
How is CPM calculated?
The cost per thousand impressions or CPM is achieved by dividing the coste between impressions and multiplying it by 1.000. Here is the CPM formula:
CPM = (Cost / Impressions) x 1.000
If, for example, a campaign costs 500 euros and has 10.000 impressions, it would be calculated as follows:
CPM = (500 euros / 10.000) x 1000 = 50 euros
The CPM in advertising is used when the advertiser intends with a campaign to create notoriety and brand recognition without seeking an immediate response in terms of increased sales or traffic to the web.