• • Focus on Impressions: Unlike CPC (cost per click) that focuses on clicks, CPM tracks impressions, which are simply the number of times your ad is displayed.

  • Brand Awareness: CPM is commonly used for brand awareness campaigns where the goal is to get as many people to see your ad as possible, even if they don't click on it.

Imagine you advertise your local bakery on a high-traffic website. CPM would tell you the cost for every thousand times your bakery ad appears on that website, regardless of how many people actually click on it to visit your bakery.

By using CPM, you can gauge the efficiency of reaching a broad audience for brand recognition purposes. It's a good option if your primary goal is to get your name out there rather than driving immediate clicks to your website.

How to measure CPM

Formula: CPM = Total Ad Cost / Number of Impressions (in Thousands) Key Point: Since CPM refers to the cost per thousand impressions, we need to express the number of impressions in thousands before dividing by the total ad cost.

Example 1: Display Advertising

• • Let's say you pay $20 for a display advertising campaign on a news website.

  • Your ad receives 250,000 impressions (the number of times it's shown on the website).

Calculate Impressions in Thousands: Divide the total impressions by 1,000: 250,000 impressions / 1,000 = 250 impressions (in thousands)

Now Apply the Formula:

• • CPM = $20 (Total Cost) / 250 impressions (in thousands) = $0.08 per thousand impressions

This means you paid $0.08 for every thousand times your ad was displayed on the news website.

Example 2: Social Media Promotion

• • Imagine you spend $50 to promote a social media post to a targeted audience.

  • The promotion generates 32,100 impressions.

Calculate Impressions in Thousands: Divide the total impressions by 1,000: 32,100 impressions / 1,000 = 32.1 impressions (in thousands)

Apply the Formula:

• • CPM = $50 (Total Cost) / 32.1 impressions (in thousands) = $1.56 per thousand impressions

Here, your CPM is higher at $1.56 per thousand impressions. This could be because you targeted a more specific audience on social media compared to the general website audience in Example 1.

Finding Your CPM: Most advertising platforms will provide your CPM data within their reporting dashboards. You'll find the total ad spend and impression figures there. By calculating impressions in thousands, you can easily determine your CPM using the formula.