What does CPM mean in marketing

In marketing, “cost per thousand” (CPM) refers to the price an advertiser pays to have their commercial aired 1,000 times. CPM is widely used as a metric of a campaign’s performance since it enables advertisers to compare the expenses of several advertising campaigns and assess the relative worth of each.

For example, if an advertiser pays $5 CPM for a specific campaign, they are paying $5 to display their ad 1,000 times. This is especially useful for comparing various ad campaigns because it allows advertisers to determine which campaigns provide the best value for their money.

The effectiveness of display advertising, such as banner ads, is commonly measured using CPM; however, other types of advertising, such as video commercials or sponsored content, can also be measured using CPM. Although it is frequently reported in dollars, it can also be expressed as a percentage of the whole ad expenditure.

The Benefits of CPM advertising:

CPM is often a less expensive option compared to CPA (cost per action) or CPC (cost per click) advertising, although the price may vary depending on where the ads are shown. For example, an advertiser may need to bid more to show their ad on a highly visited website or to a larger audience. CPM campaigns can effectively increase brand awareness, reach highly relevant leads, and generate industry buzz. Social media platforms such as Facebook or Instagram allow for targeted CPM campaigns, which can help generate awareness for a low cost. It’s important to note that the success of a CPM campaign may depend on the quality of the content or display ad.