CPM (cost per mille)

CPM (Cost Per Mille) is a pricing model for (online) advertising in which costs are calculated per 1,000 ad impressions. Mille is the Latin word for “thousand”.

Calculating CPM

Cost of the advertising campaign
──────────────── = CPM
Number of impressions ÷ 1,000

Or expressed as a formula:

CPM = (Total cost ÷ Number of impressions) × 1,000

Impressions and viewable impressions
An impression is a recorded display of an advertisement. This does not necessarily mean that the advertisement was actually visible to the user.

For this reason, digital advertising distinguishes between impressions and viewable impressions.

According to the international guidelines of the Media Rating Council (MRC) and the Interactive Advertising Bureau (IAB), an advertisement is considered viewable when:

• Display advertisements: at least 50% of the advertisement is visible for 1 second.
• Large display formats: at least 30% of the advertisement is visible for 1 second.
• Video advertisements: at least 50% of the video is visible for 2 seconds.

These guidelines are the international standard for measuring ad viewability.

CPM in practice
CPM is one of the most widely used pricing models for digital display, video and social media advertising campaigns. Advertisers pay for the number of delivered impressions, while publishers are responsible for delivering the agreed number of ad impressions.

In addition to traditional CPM, campaigns are increasingly evaluated using additional quality metrics, such as:

• Viewability (viewable impressions)
• Brand safety
• Fraud detection (invalid traffic and bots)
• Attention metrics (the actual attention paid to advertisements)

As a result, advertisers evaluate campaigns not only by the number of impressions delivered, but also by the quality of the audience reached.

CPM and viewability
Although viewability is an important quality metric, not every campaign is traded or billed solely on the basis of viewable impressions. The measurement methods and KPIs used vary by publisher, advertising platform and campaign.

In practice, advertisers and publishers therefore agree on the desired level of viewability in advance, ensuring that both parties understand the quality standards the campaign is expected to achieve.