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CPM stands for Cost Per Mille and it refers to the cost required, in advertising, to get 1,000 impressions. It’s also sometimes referred to as Cost Per Thousand.
CPM is an important metric in advertising. It reveals how effective marketers are using their advertising budget and, with a more thorough analysis, helps them make their ads more profitable.
The formula for calculating CPM is as follows.
CPM = (Total Ad Spend / Total Ad Impressions) * 1000
Example: $2,000 CPM = ($5,000 / 2,500 Impressions) * 1000
But there’s no need to pull out a calculator. You can use our free online CPM calculator above. Just enter the total cost of your campaign and the number of ad impressions, then click “Calculate CPM” — we’ll do the rest!
Advertising has a lot of different metrics — all of which have their own acronym. This can get confusing. To help you understand the difference between CPM, CPA, and CPC, here are some quick definitions…
CPM — Advertising cost per thousand impressions. This is most useful when you’re trying to build brand awareness.
CPA — Advertising cost per action taken (conversion, opt-in, sales, etc). This is most useful when you’re trying to accomplish a very specific goal.
CPC — Advertising cost per click. This is most useful when you have a strict advertising budget and you want to measure the cost of each click.
Each advertising platform is different. And because of that, your expected CPM should be partly determined by where you’re advertising.
Here’s a breakdown of the average CPM on all the big advertising platforms. Compare your own CPM to determine how your advertisements stack up.
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