CPM, or Cost Per Mille, is a crucial metric in digital advertising that helps marketers understand the cost of reaching 1,000 impressions. It is widely used in programmatic advertising, display ads, and video campaigns to measure cost efficiency.
CPM Formula
The formula for calculating CPM is:
CPM = (Total Cost / Total Impressions) × 1000
Where:
- Total Cost: The amount spent on the ad campaign.
- Total Impressions: The number of times the ad was displayed.
Example Calculation
If you spent $500 on an ad campaign and received 200,000 impressions, the CPM would be:
CPM = (500 / 200000) × 1000 = 2.5
So, the CPM is $2.50, meaning you paid $2.50 for every 1,000 impressions.
Why is CPM Important?
- Budget Planning: Helps advertisers allocate their budgets efficiently.
- Comparative Analysis: Allows advertisers to compare costs across different platforms.
- Performance Benchmarking: Assists in evaluating campaign effectiveness.
Use our CPM Calculator to quickly determine your ad costs and optimize your marketing strategy!
