Cost per impression (CPM) is an agreed upon payment plan for advertisements based on the number of impressions an ad receives.
Typically, CPM is calculated based on 1000 impressions. Businesses are charged for each impression, or viewing. These ads do not charge when a user to click, such as with pay per click ads.
(Note: The “M” in CPM comes from the Roman numeral for 1000.)
Why is Cost Per Impression Important?
Cost per impression is important because it can be used to compare the overall cost effectiveness of different marketing vehicles. Ideally, the “vehicle” with the lowest CPM is typically the most efficient because if requires less money to reach 1000 users.
The CPM for each campaign helps to monitor the success of paid marketing campaigns and is a useful metric when calculating your ROI.