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What Is Cost-Per-Mille (CPM)? | Speed Commerce

What Is Cost-Per-Mille (CPM)?

3PL Glossary > Cost-Per-Mille (CPM)

What Is Cost-Per-Mille (CPM)?

Cost-per-mille (CPM) is a digital advertising pricing model where advertisers pay a specific cost for one thousand impressions of their ad. The term "mille" comes from the Latin word for thousand, and in the context of digital advertising, it represents the number of times an ad is displayed to users. CPM is commonly used for display advertising, where the primary goal is to increase brand visibility and reach a large audience, regardless of whether users click on the ad.

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In the CPM model, advertisers negotiate with publishers or advertising platforms to determine the cost they are willing to pay for every one thousand impressions. The agreed-upon rate is applied based on the number of times the ad is shown, and advertisers are charged accordingly. CPM is particularly suitable for campaigns focused on building brand awareness, as it provides advertisers with a predictable and measurable cost structure based on the volume of ad views.

While CPM is a common metric for display advertising, it should be distinguished from cost-per-click (CPC) and cost-per-action (CPA) models, where advertisers pay based on user clicks or specific actions. CPM is ideal for advertisers seeking broad exposure and visibility, making it a valuable metric for brand-oriented campaigns that prioritize reaching a large audience over direct user engagement.

FAQs

No. In CPM, advertisers pay for every one thousand impressions of their ad, regardless of whether users click on it. The focus is on achieving broad visibility and exposure rather than user interactions.

No. CPM is distinct from CPC and CPA. In CPM, advertisers pay for impressions, while in CPC, they pay for clicks, and in CPA, they pay for specific user actions or conversions. Each pricing model serves different advertising goals.

Yes. Advertisers can negotiate the CPM rate with publishers or advertising platforms based on factors such as ad placement, targeting options, and the perceived value of the audience reached. Negotiating can help achieve a more favorable cost structure.

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