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Cost per Thousand Impressions (CPM)

Cost per Thousand Impressions (CPM)

Noun
[kawst per thou-zuhnd im-presh-uhns]

Cost per thousand impressions or cost per mille (CPM) is a key metric used to determine the cost incurred for a thousand ad impressions on a web page. CPM is particularly important in display advertising, where advertisers pay for the number of times their ad is displayed to potential viewers, irrespective of whether the ad is clicked or not. The "M" in CPM represents the Roman numeral for 1,000, indicating that the cost is measured per thousand impressions.

CPM helps marketers compare the cost-effectiveness of different channels, campaigns and partnerships. It is a preferred pricing model for brand awareness campaigns, as it ensures a certain level of visibility and exposure for a fixed budget.

To calculate CPM, the  formula is: CPM = (Total Cost of Ad Campaign / Total Ad Impressions) x 1,000

By utilizing CPM, advertisers can assess the value of their online ads, evaluate their ROI, and optimize their marketing strategies for better audience targeting and increased ad performance.

Example:

Ronald, a marketing manager at a B2B SaaS company, analyzed the performance of their latest marketing campaign and found that the cost per thousand impressions was notably lower compared to their previous efforts. This resulted in increased brand visibility among their target audience.

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