CPM stands for cost per thousand impressions. CPM is an advertising term to see how cost-effective an advertising campaign is. The less the cost per thousand impressions, the more efficient the advertising. The higher the cost per thousand impressions, the less efficient the advertising and the more likely that the company is wasting money on its advertising.
Instructions
1 :-Determine the number of units of advertising. The number of units is equal to the number of impressions divided by 1,000. For example, a company takes out ad space and estimates 500,000 people see the ad. So, 500,000 divided by 1,000 equals 500 units.
2 :-Determine the total cost of the ads. In our example, the ad cost the company $5,000.
3 :-Divide the cost of the ads by the number of units to calculate CPM. In our example, $5,000 divided by 500 equals a CPM of $10.
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