CPM (cost per mille)
CPM (cost per mille) is the cost of a thousand ad impressions; a payment model where you pay for reach rather than clicks or applications.
In plain words
When paying for impressions, the advertiser buys attention: the ad will be seen a certain number of times, and the rest depends on how compelling it is. The price is quoted per thousand impressions because a single impression costs too little to work with conveniently.
How it is calculated
CPM = advertising spend / number of impressions x 1,000.
A hypothetical example: for 400 units the ad was shown 200,000 times. CPM is 2 units. If 1% of viewers clicked, that gives 2,000 clicks and a cost per click of 0.2 units. The chain is: impression, click, application, conversation, payment.
Why it matters to an owner
CPM answers the question of how much it costs to reach a particular audience. It is useful when the goal is awareness, or when the audience is narrow and expensive. Comparing CPM across audiences shows where attention is cheaper.
But impressions do not make profit. Between them and the money stand the creative, the page and the handling of applications. If the team loses leads, even the cheapest reach will not pay off.
Common mistake
Treating a low CPM as success. Cheap impressions often mean a non-target audience or poor placements. Another risk is running the same creative for too long: people stop noticing it, clicks fall, while CPM stays the same.
More in Signals
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