CPM (Cost Per Mille)
The cost per 1,000 ad impressions, used primarily for brand awareness campaigns.
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Definition
CPM (Cost Per Mille, where "mille" is Latin for thousand) is the cost an advertiser pays for 1,000 ad impressions. It is the standard pricing model for display advertising, video ads, and brand awareness campaigns.
CPM rates vary widely by platform, placement, and targeting: Facebook/Instagram ($7-12), YouTube ($6-15), display networks ($2-5), and premium publishers ($15-50+). Highly targeted campaigns (specific demographics, interests) typically have higher CPMs.
CPM is most appropriate for awareness campaigns where the goal is visibility rather than immediate clicks or conversions. For direct response campaigns, CPC or CPA (Cost Per Action) models typically deliver better ROI.
Why It Matters for Founders
Understanding CPM helps marketers evaluate the relative cost of reaching audiences across platforms and campaigns. It enables apples-to-apples comparison of ad costs across different channels and formats.
For startups, CPM campaigns make sense when building brand awareness in a new market. They are less effective for direct response (signups, purchases), where CPC or CPA models provide more predictable costs per outcome.
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Formula
CPM = (Total Ad Spend / Total Impressions) × 1,000Real-World Example
A display campaign costs $5,000 and generates 500,000 impressions. CPM = ($5,000 / 500,000) × 1,000 = $10 per thousand impressions.
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Frequently Asked Questions
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