The full form of CPM is Cost per Mile. Cost per thousand is also known as cost per mile in Latin. CPM is a marketing term that refers to the cost of 1,000 commercial encounters on one webpage. For example, if a website producer pays Rs. 150 CPM, an individual should pay Rs. 150/- for every thousand impressions of the advertisement.
Cost per mille (CPM) = Cost/ Thousand impressions
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- CPM is a popular web ad pricing approach.
- The effectiveness of a CPM campaign is determined by its CTR (click-through rate), which shows the percentage of people who have seen and opened your advertisement.
- A 2% CTR is assigned to an advertisement that receives two clicks for every 100 impressions.
- However, the success of advertising cannot be measured solely by CTR because an ad that is not clicked but is watched by a client can have an impact.