CPM Full Form : Cost Per Mille

CPM Full Form: The full form of CPM is Cost per Mille. It is a terminology commonly used in marketing to refer to the cost of a thousand units. For example: Suppose the CPM of GeeksforGeeks is Rs 50, this means that the advertisement cost is Rs. 50 for 1000 impressions or views. Advertisers use this as the standard to calculate the cost of the advertisement. It is also used in online marketing, television, radio, etc.

What is CPM?

CPM is an abbreviation for Cost per Mille, Mille is the French/Latin word for a thousand. CPM is a measure for pricing the ads on a website. It is calculated based on the click-through rate (number of views and visits to the advertisement), 5% CTR indicates that out of 100 impressions, 5 actually clicked/visited the ad. CPM marketing is more about quality than quantity. A good CPM indicates better reach, engagement rate among viewers, and increased brand awareness. Advertisers should always follow measures to improve CPM by creating attention-grabbing ads, choosing relevant platforms to promote, and knowing the target audience of the product

How to Calculate CPM?

CPM is calculated by using the budget available by the advertiser and the number of impressions expected on the advertising platform.

• Determine Impression: Ask the advertiser about the target audience, this way you can estimate the number of impressions.
• Determine the Budget: The advertiser should provide the budget to be spent on the ad.

CPM = (Total Cost / No. of Impression) x 1000

How to Optimize CPM for Advertisers?

CPM is the value used by website to charge for the advertisements. Optimizing is beneficial for the advertiser and their business hence one should follow below practises to cut costs:

• Advertizers should compare the CPM of different websites and choose appropriate advertising platform.
• Identify the target audience and check there engagement ont the website your ad is to be published.
• The ad should be eye-catchy and with creative visuals.
• The ads should be linked to the home page or most relevent page of the product.
• Identify the most active time of your target customer and you can negotiate to present the ad at that time.

Pros of CPM

Following are some of the pros of CPM:

• It increases brand awareness and ease of reach.
• It is usually cheaper than other pricing strategies.
• The costs of the media plan can be managed more precisely.

Cons of CPM

Following are some of the cons of CPM:

• The budget exceeds during when product is in demand.
• It might be difficult to know the difference between impression and views.
• Ad-blocker can prevent the display of ad.

FAQs – CPM

1. What is the cost per mille price?

This price is calculated and mentioned in currency such as $ or Rupees. Its price varies on basis of total cost and number of impression over the advertisement. The CPM value is used to calculate the charges for advertisement as per the impression gained through it.

2. What does Mille mean in CPM?

Mille is a greek word which refers to the number 1000. CPM is derived using the cost for a thousand impression. The use of “mille” in CPM emphasizes that the cost is related to a specific number of impressions i.e 1,000.

3. Why is it called cost per mille?

It is the cost per 1000 impression. It is called so because CPM is the metric used to represent cost for 1000 impression. Later this CPM value is used to find total cost. This terminolofy has been used in the online advertisements industry for a long time and has secured a good space in businesses

4. What is an example of per mille?

If the CPM of the ad is Rs. 100, then this means that 1000 impression will cost Rs. 100 and total expenditure on ad can be calculated by mutiplying the CPM with total impressions. The best example of this term is around this article, you may see an advertisement by the corners of this web page, the impression for that has incremented since you are viewing this article and ad too. Similarly, total impressions on that ad will be used to calculate total expenditure of that ad using the formula of CPM.

5. Is CPM per 1000 views?

CPM is calculated over impression rather than views because impression counts the number of times ad is displayed while view will be counted only if user clicks the ad. The advertiser needs to pay not for just for the clicks/visits on the ad but for the impression who just watches it and may visit that product later.