CPM (Cost per Million)

Cost per Million (CPM) is a pricing model that originally emerged in the context of advertising in conventional mass media. But nowadays it is also commonly known and widespread in the field of online marketing.

Cost-per-Mille basically is the price an advertiser has to pay for the display of thousand ad impressions in a publisher’s medium. In contrast to success-based accounting metrics such as Cost-per-Click or Cost-per-Lead, the Cost-per-Million model actually is a lump sum price. Additionally, advertisers have to pay in advance of the delivery of advertisements.

The CPM varies depending on the quality of the target group and the quality of the website.

CPM is used in marketing as a benchmarking metric to calculate the relative cost of an advertising campaign or an ad message in a given medium. Advertisers can divide the cost of an advertising placement by the number of impressions (expressed in thousands) it is generating to calculate CPM.

All in all, the purpose of CPM is to compare costs of advertising campaigns within and across different media.

You can find a detailed overview of all pricing models available in this article.