What is CPM?
Cost per thousand impressions of an online ad. When an ad is served to a user, it counts as an impression. A CPM model can be a good plan if your campaign goal is to raise awareness of your brand. If your campaign goal is to increase user interaction with your brand or prompt users to take a specific action, such as signing up for a loyalty program, a cost-per-click (CPC) model may be a better choice.
Example
For example, if an ad network charges $1,000 for delivering 1 million impressions, the CPM would be $1:
CPM = (Total Cost / Number of Impressions) * 1,000
CPM = ($1,000 / 1,000,000) * 1,000
CPM = $1
In this case, the advertiser pays $1 for every 1,000 times their ad is shown to users. CPM is often used for brand awareness campaigns where the goal is to reach a large audience. If the campaign goal is to increase user interaction or prompt specific actions, such as signing up for a loyalty program, a cost-per-click (CPC) model may be more suitable. Thank you for providing this explanation!