Cost per mille

Cost per mille (CPM), also called cost ‰ and cost per thousand (CPT) (in Latin mille means thousand), is a commonly used measurement in advertising. Radio, television, newspaper, magazine, out-of-home advertising, and online advertising can be purchased on the basis of showing the ad to one thousand viewers. It is used in marketing as a benchmark to calculate the relative cost of an advertising campaign or an ad message in a given medium. For media without countable views, CPM reflects the cost per 1000 estimated views of the ad. This traditional form of measuring advertising cost can also be used in tandem with performance based models such as percentage of sale, or cost per acquisition (CPA).
An example of computing the CPM:
Total cost for running the ad is $15,000.
The total estimated audience is 2,400,000 people.
CPM is calculated as: ($15,000/2,400,000)*1000 = $6.25 per thousand views


Effective cost per mille


Effective cost per mille (eCPM) is used to measure the effectiveness of a publisher's inventory being sold (by the publisher) via a CPA, CPC, or CPT basis. In other words, the eCPM tells the publisher what they would have received if they sold the advertising inventory on a CPM basis (instead of a CPA, CPC, or CPT basis). This information can be used to compare revenue across channels that may have widely varying traffic - by figuring the earnings per thousand.


There are two banners: "Super Apps" and "Fantastic Apps".
The publishers earn $1 per click.
Both banners were published for the duration of one week.
"Super Apps" was viewed by 2000 visitors from which 10 clicked on it.
"Fantastic Apps" was viewed by 2000 visitors from which 50 clicked on it.
This shows that:
"Super Apps" has an eCPM of $5 ($10/2000 * 1000)
"Fantastic Apps" has an eCPM of $25 ($50/2000 * 1000)