What is CPM?

Cost per mille (CPM), also called cost ‰ and cost per thousand (CPT), is a commonly used measurement in advertising. In Latin mille means thousand, therefore, CPM means cost per thousand. Radio, television, newspaper, magazine, Out-of-home advertising and online advertising can be purchased on the basis of what it costs to show the ad to one thousand viewers (CPM). It is used in marketing as a benchmark to calculate the relative cost of an advertising campaign or an ad message in a given medium. Rather than an absolute cost, CPM estimates the cost per 1000 views of the ad.

An example of computing the CPM:

1. Total cost for running the ad is $15,000.
2. The total audience is 2,400,000 people.
3. CPM is calculated as CPM = $15,000/(2,400,000/1000) = $6.25