Cost Per Thousand - CPM

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DEFINITION of 'Cost Per Thousand - CPM'

The price of 1,000 advertisement impressions on one webpage. If a website publisher charges $2 CPM, that means an advertiser must pay $2 for every 1,000 impressions of its ad. The "M" in CPM represents the roman numeral for 1,000. CPM is the most common method for pricing web ads. However, an advertisement's success cannot be measured by CTR alone, because an ad that is viewed but not clicked on may still have an impact.

BREAKING DOWN 'Cost Per Thousand - CPM'

Website publishers like CPM advertising because they get paid for simply displaying the ads. Other methods of pricing website advertising include cost per click (CPC), where the advertiser pays each time a website visitor actually clicks on the ad, and cost per acquisition (CPA), where the advertiser only pays each time a website visitor makes a purchase that can be directly traced to having clicked on that ad. Different pricing methods will be more appropriate for some ad campaigns than others. CPM makes the most sense for a campaign focused on heightening brand awareness or delivering a specific message.

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