CPM - what is it?
Specifically, CPM means “Cost Per Mille”. In other words, CPM is the cost of showing an ad 1,000 times. It is one of the methods used to price marketing.
How to calculate CPM?
To calculate CPM, the formula is as follows: CPM = (Total cost / Number of impressions) x 1000
Example
Let’s say you ran an ad campaign on Facebook that cost 10,000 kroner and generated 100,000 impressions. This results in the following CPM: CPM = (10,000 / 100,000) x 1000 CPM = 100 kroner per thousand impressions A low CPM value gives you as a marketer an indication of which channel is the most cost-effective in terms of the number of impressions per krone spent on the campaign. CPM can be a useful metric if your company wants to increase brand awareness. If you want to focus more on conversion, the CPA and CPC parameters will be better to use.
