Cost Per Mille (CPM) is a common advertising metric that measures the cost of displaying a thousand ad impressions. The term “mille” comes from the Latin word for one thousand. CPM is primarily used in display advertising, where advertisers pay for the number of times their ad is shown to users, regardless of whether the user interacts with it. Advertisers often use CPM to evaluate the cost-effectiveness of reaching their target audience and make informed decisions about their advertising budget. Conversely, publishers use CPM to set prices for their ad inventory and maximize their revenue from displaying ads on their websites or apps.
To calculate CPM, you need to divide the total cost of the advertising campaign by the number of ad impressions (in thousands):
CPM = (Total Advertising Cost / Number of Ad Impressions) x 1000
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