Cost per mille (CPM), which is also called cost per thousand, is a metric that’s used by digital marketers to measure the cost of an advertisement per one thousand clicks or impressions. It’s often the standard pricing strategy for many online ads.
“Mille” is Latin for a thousand. Brands who spend on cost per mille advertising are paying for the advertiser’s ability to expose them to one thousand people.
So, for example, in email marketing, CPM could refer to the price of sending a thousand email messages.
The Purpose of CPM
The CPM metric enables marketers to make a comparison between the costs of advertising campaigns within and across different channels. A typical marketing campaign may try to reach potential customers in multiple locations and through different forms of media.
So, the cost per thousand impressions (CPM) metric can allow marketers to make cost comparisons between these channels and then decide which ones are benefiting the business the most.
Also, CPM means that advertisers can quickly invest in ads without having to worry about other minute details.
Meanwhile, publishers of such ads also don't have to wait to get paid for when a consumer clicks on it. Instead, they can get paid for every 1000 views. And ad networks are quite willing to pay publishers based on visitor views alone. So, it ends up acting like a mutually beneficial system!
How to Calculate Cost Per Mille
Now that you know why cost per mille matters in advertisements, let’s take a look at how to calculate it.
Marketers usually measure CPM by dividing the cost of their online ad by the number of views (often a thousand) that it generates. For example, if the cost of the CPM campaign is $400, and the number of ad impressions is 1000, the CPM is $400.
Meanwhile, CPM ad campaigns function a bit differently than CPC (cost per click) campaigns. Instead of being concerned with the number of clicks on an ad, advertisers choose to focus their energy on the platform itself and how many customers it may have.
What to Expect from CPM
If you’re considering investing in CPM ads, we should discuss what you may expect in return.
So, for instance, a mobile developer or publisher should expect to earn anything from $0.05 to $15 per CPC campaign, or per 1000 views of a particular advertisement.
Despite that, it’s challenging to know for certain how much revenue a CPM campaign could help you generate because it can vary according to the publisher, webspace, and campaign.
Most advertisers are likely to pay a fixed rate for a CPM campaign though, which implies that a publisher or developer can expect nearly the same figure every time a thousand views are reached.
Some publishers may also have multiple contracts with several advertisers, expanding their earning potential. It’s an amazing way for publishers and mobile app developers to earn additional revenue! At the same time, it can also help improve views and help advertisers earn more profit.
Overall, CPM or cost per mille is a simple and fast ad pricing model that can work well for mass advertising, such as banner ads displayed across a variety of web pages. The model relies on charging advertisers per thousand views instead of clicks or other forms of engagement.
And yes, while it will likely end up being a lot more profitable for publishers, it also makes it easier for marketers to run ads across multiple platforms.