Cost per mille

Cost per mille (CPM), also called cost per thousand (CPT) (in Latin, French and Italian, "mille" means "one thousand"), is a commonly used measurement in advertising. It is the cost an advertiser pays for one thousand views or impressions of an advertisement. Radio, television, newspaper, magazine, out-of-home advertising, and online advertising can be purchased on the basis of exposing the ad to one thousand viewers or listeners. It is used in marketing as a benchmarking metric to calculate the relative cost of an advertising campaign or an ad message in a given medium.
The "cost per thousand advertising impressions" metric (CPM) is calculated by dividing the cost of an advertising placement by the number of impressions (expressed in thousands) that it generates. CPM is useful for comparing the relative efficiency of various advertising opportunities or media and in evaluating the overall costs of advertising campaigns.
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).
Purpose.
The purpose of the CPM metric is to compare the costs of advertising campaigns within and across different media. A typical advertising campaign might try to reach potential consumers in multiple locations and through various media. The cost per thousand impressions (CPM) metric enables marketers to make cost comparisons between these media, both at the planning stage and during reviews of past campaigns.
Marketers calculate CPM by dividing advertising campaign costs by the number of impressions (or opportunities-to-see) that are delivered by each part of the campaign. Thus, CPM is the cost of a media campaign, relative to its success in generating impressions to see. As the impression counts are generally sizeable, marketers customarily work with the CPM impressions. Dividing by 1,000 is an industry-standard.
Similarly, revenue can be expressed in terms of Revenue per mille (RPM).
In email marketing, CPM (cost per mile) refers to the cost of sending a thousand email messages. Also referred to as CPT (cost per thousand), this pricing method is used by email service providers (ESPs) to cover the cost of the mail server, bandwidth, hosting images, deliverability services, and bounce management.
Construction.
To calculate CPM, marketers first state the results of a media campaign (gross impressions). Second, they divide that result into the relevant media cost:
For example:
Note: Notice how the CPM is $6.25 and not $0.00625, this is because we are looking at cost per thousand.
Related metrics and concepts.
Effective cost per mille.
The Search Engine Marketing Professionals Organization (SEMPO) defines eCPM as:
In internet marketing, effective cost per mille is used to measure the effectiveness of a publisher's inventory being sold (by the publisher) via a CPA, CPC, or Cost per time 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 Cost per time). This information can be used to compare revenue across channels that may have widely varying traffic—by figuring the earnings per thousand impressions.
Example
This shows that:
Cost per point (CPP) or cost per rating point (CPR or CPRP).
CPP is the cost of an advertising campaign, relative to the rating points delivered. In a manner similar to CPM, cost per point measures the cost per rating point for an advertising campaign by dividing the cost of the advertising by the rating points delivered.
The American Marketing Association defines cost-per-rating point (CPR or CPRP) as: