What is CPM (Cost Per Thousand Impressions)?

How CPM Works in Digital Advertising

CPM (Cost Per Thousand Impressions) is a common pricing model in digital advertising where advertisers pay for every 1,000 ad impressions. The "M" in CPM stands for "mille," which is Latin for thousand. It’s widely used for display and banner ads, especially in brand awareness campaigns where the goal is to reach a large audience rather than drive immediate action like clicks or conversions.

How CPM Works in Digital Advertising

CPM is focused on visibility, not engagement. Every time your ad is displayed on a webpage, it counts as an impression, regardless of whether the user interacts with it. For example, if your CPM rate is $10, you will pay $10 every time your ad reaches 1,000 impressions. This model is useful when you want your ad to be seen by as many people as possible.

When to Use CPM for Brand Awareness

CPM is ideal for campaigns designed to boost brand awareness rather than drive direct engagement like clicks or purchases. Since you’re paying for impressions, it’s a cost-effective way to get your brand in front of a large audience, particularly when the goal is to build recognition or deliver a message, rather than encourage immediate interaction.

Benefits of CPM for Display Ads

• Wide Reach: CPM ensures your ad is shown to a large number of people, making it ideal for raising brand awareness.
• Cost Control: With CPM, you know exactly how much you’ll spend to achieve a certain number of impressions.
• Brand Visibility: Even if users don’t click on your ad, repeated exposure can improve brand recall and recognition over time.

CPM vs CPC: Which is Right for Your Campaign?

While CPM focuses on visibility, CPC (Cost Per Click) is more about driving engagement, where advertisers pay only when a user clicks on the ad. The choice between CPM and CPC depends on your campaign goals. Use CPM when you want to increase brand awareness or promote a message to a broad audience. Opt for CPC if your goal is to drive clicks and direct traffic to your website.

Examples of CPM in Action

A company launching a new product might use CPM to display their ad across multiple websites, ensuring it’s seen by a wide audience, even if users don’t immediately engage with the ad. It’s especially effective for campaigns that want to leave a lasting impression rather than drive immediate sales.