What is CPM?

CPM is short form for Cost Per Mille

CPM

What is cpm?

What does cpm mean? Lets get to the meaning of cost per mille word by word.

Cost you know already, it means value or amount in some form of currency.

The word mille comes from latin and it means thousand or one thousand. People often confuse this Mille with Mile. Both of these words different.

Mile is used to measure length. 1 Mile is 1609 meters or 5280 feet but we are not interested in that.

Ok, so whole mean is cost per one thousand. But what one thousand?

It can be one thousand ad views or one thousand ad impressions.

Almost all of the times impressions are confused with views.

A page or an advertisement is considered viewed if user actually sees the advertisement, when ad comes in focus on the page. On the other hand an impression is counted when a page or an advertisement is loaded on the page. It doesn't matter it user actually scrolls and see the ad, an impression is still counted.

So CPM is commonly used measurement in advertising industry.

Depeding on the context it can have slightly different meanings.

What different meanings, you ask?

If you are advertiser and you want to advertise your ad on bunch of reputed websites then you go to popular advertising network. You can choose different types of advertisements, lets say you choose CPM model. In this you will pay a fixed amount for 1000 views or impressions on your ad. The networks that provide cpm model are known as CPM Ad Networks.

If you are website owner and you have signed up on this particular CPM Ad Network then you will earn the exact amount set by advertiser when an ad is displayed 1000 times on your website.

There are cpm ad networks such popads which lets you set the CPM you want to earn on 1000 ad impressions. If you set certian, it guarantees that you will at least earn that much when thousand ad impressions are completed on your account.

Setting high cpm rates can have adverse effects but that is not the topic of this article.

How do you calculate CPM?

The math formula to calculate cpm is below

CPM = ((cost of campaign) / (impressions received)) * 1000

This means CPM is equal to the cost of compaign divided by impressions received multiplied by 1000.

Lets understand this with an example. Consider cost of compaign to be $100 and impressions received are 10,000 then your CPM would be $10.

In simple words it means you are paying 10 dollars to get 1000 ad impressions. This is just an example and in real world you will get ton of impressions. Real world rate would be $1 for 1000 for average quality.

The this CPM is usually given in your dashboard on website of your cpm ad network.

There are many cpm ad networks available in todays advertisment industry.

Some popular cpm ad networks are

Google had cpm ad network model for many years but it was not effective until recently. Now we can surely say google is the best ad network there is, not only cpc but also CPM.

  • Google Adsense
  • Popads.net
  • adsterra.com
  • UberCPM
  • PropellerAds
  • BuySellAds

If something was left out in this article, check out this on CPM.

You may have many questions like how much does youtube pay for 1000 views, what is its cpm?

Please comment to get quickest response.

And please share this article in your community or your blog, for those who are learning about advertisement industry.





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