Marketing Glossary
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Cost per Impression (CPM)

What is cost per impression (CPM)?

Cost per Impression (CPM) is a pricing model used in online advertising, where advertisers pay a fixed cost for every 1,000 impressions (views) of their ad. CPM is typically used to measure the cost effectiveness of an online advertising campaign.

Why is CPM important?

Cost per Impression (CPM) is important because it is a key metric used to measure the effectiveness of an advertising campaign. CPM helps advertisers determine the cost of reaching 1,000 people with their ad. It is also used to compare the cost of different advertising platforms and to determine the return on investment (ROI) of an ad campaign. CPM is an important metric for advertisers to understand and track in order to optimize their campaigns and maximize their ROI.

How can I use CPM?

Here are a few tips for effectively using CPM in your advertising campaigns:

  1. Set clear goals: Before you launch a CPM campaign, it's important to have a clear idea of what you want to achieve. Do you want to increase brand awareness, drive traffic to your website, or generate leads? By setting clear goals, you can more effectively measure the success of your campaign and make data-driven decisions about how to optimize it.
  2. Target the right audience: To get the most out of your CPM campaign, it's important to target the right audience. By using demographics, interests, and other targeting options, you can ensure that your ads are being shown to the users most likely to be interested in your products or services.
  3. Optimize your ad creative: The creative for your CPM ads should be eye-catching and compelling, and should effectively communicate the value of your products or services. Make sure to A/B test different versions of your ad creative to see which performs best.
  4. Track and analyze your results: To effectively use CPM, it's important to track and analyze your results. Use tools like Google Analytics to measure the performance of your CPM campaign and identify areas where you can make improvements.
  5. Use CPM in combination with other ad formats: CPM is just one ad format that you can use. By combining CPM with other ad formats, such as CPC (cost-per-click) or CPA (cost-per-action), you can more effectively reach and convert your target audience.

Brief history of CPM

CPM, which stands for "cost per thousand," is a term used to describe the cost of an advertising campaign in which the advertiser pays for every 1,000 impressions (i.e. views) of an ad. The term "impressions" refers to the number of times an ad is displayed to users, regardless of whether the users actually click on the ad or not.

The concept of CPM has been around since the early days of advertising, but it gained widespread use with the rise of digital advertising in the late 1990s and early 2000s. As more businesses started to advertise online, the ability to track and measure the effectiveness of their campaigns became increasingly important. CPM provided a way for advertisers to pay for ad impressions rather than clicks, which made it easier for them to measure the reach of their campaigns and calculate their return on investment (ROI).

Today, CPM is a common pricing model for display advertising, such as banner ads, and is widely used by businesses of all sizes to reach and engage their target audience online.

Related Terms

Return on Investment (ROI)

Customer Acquisition Cost (CAC)

Conversion Path

Return on Investment (ROI)