We are independent & ad-supported. We may earn a commission for purchases made through our links.
WiseGEEK

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Marketing

What Is the Role of CPM in Online Advertising?

By Alex Newth
Updated May 17, 2024
Our promise to you
WiseGEEK is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGEEK, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Cost per mille (CPM) is an online marketing element that refers to how much advertising costs a business for every 1,000 impressions. This term is used most frequently with impression advertising, in which the business’s banner is displayed on a website and the business is charged for every 1,000 impressions, or ad views. CPM in online advertising also is used to measure how much other advertising vehicles cost, so the business knows the most effective keywords to bid on. Another role of CPM in online advertising is cost control, especially with new businesses, so the business does not overspend its advertising budget.

CPM in online advertising is a term used most frequently with impression marketing, in which a business commissions either an advertising hub or individual website to display the business’s banner. For example, if a website says businesses can market on the site for $5 US Dollars (USD) CPM, then the website is saying the business will have its ad displayed 1,000 times for $5 USD. This is much easier than saying each ad costs $0.005 USD and gives the business a much better grasp on what it is spending. It is estimated that about 1 percent of all online users will react to an ad, so this makes 1,000 a good number for business analysts to work with.

While CPM in online advertising is usually paired with impression marketing, it also can be paired with other marketing methods so businesses know how much they are spending. In cost per click (CPC) advertising, the business pays for ad clicks; this tells the business what it is spending per click, but it is unrealistic to think that each user will click the ad. Analysts usually will measure how frequently an ad is clicked, and businesses use this to bid on the most effective keyword. If one ad costs $2 USD per click and it is estimated that the ad will be clicked 20 times out of 1,000, then the CPM is $40 USD.

One of the primary roles of CPM in online advertising is cost control, especially for new businesses. If an online business has a small marketing budget, then it cannot afford to spend money unless it sees results and it may only buy several thousand impressions. By only buying several thousand, and not having the ad constantly run, the business will be able to reach many potential customers without overstepping its budget. This also lets the business estimate and plan for online advertising costs.

WiseGEEK is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
See our Editorial Process Share Feedback

Related Articles

Discussion Comments

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.