CPM stands for “cost per mille“, with “mille” meaning 1,000. This type of ad campaign is purely based on numbers, with the cost of the ad determined for 1,000 page impressions (each time the ad is shown). An advertiser using such ads will be quoted a guaranteed number of page impressions for the ad, and then the cost will be set based on the number. For example, if an ad site has a CPM rate of $10 US Dollars (USD) and guarantees 100,000 page impressions for the ad, the cost to the advertiser will be $1,000 USD ($10 x 100). Publishers are paid a share of the revenue generated by the site selling the ads, which is usually around 45% or $450 USD for 100,000 page impressions from our previous example.
CPM (Cost Per thousand impressions) – An agreed upon price paid to a content site for displaying an advertiser’s banner a thousand times. “M” represents the Roman numeral for 1000.
Cost Per Mille. Usually reects the price of 1000 banner impressions in dollar currency. Payment depends on the number of impressions solely. For example, a banner is being shown 200,000 times at CPM of $0.5, means that the payment by theadvertiser to the publisher would be 200,000 * 0.5 / 1000 = $100.
Advantages
- The advertiser knows exactly how many times the banner will be shown, and what would be his daily / total costs.
- Common model when buying media against a specic URL / site / ad spot.
- CPM is being prioritized rst by ad-networks since the publisher knows exactly what the expected revenue per impression is.
Disadvantages
- Very weak performance matrix, very weak correlation with sales or leads.
- No indications for the advertiser on banner, campaign or media quality.
- When dealing with multiple sites or ad spots advertiser might receive cheap media instead of eective media.
- Eective frequency capping is unknown.
| Day 1 | Day 2 | Day 3 | |
| Impressions | 200,000 | 150,000 | 200,000 |
| CPM [fixed] | $0.5 | $0.5 | $0.5 |
| Cost | $100 | $75 | $100 |