Cost Per Impression (CPM) refers to a pricing model in online advertising where advertisers pay a set fee for each thousand times their ad is displayed to users. The term “impression” denotes each instance an ad appears on a user’s screen, regardless of whether it is clicked. CPM is commonly used to measure the cost-effectiveness of ad campaigns, especially for brand awareness, where the goal is to maximize visibility rather than direct interaction. The formula to calculate CPM is:
CPM = Total Cost of Ad Campaign / Number of Impressions × 1000
This metric helps advertisers assess how much they are spending to reach a broad audience and allows for budget allocation and performance evaluation across different advertising platforms.
