Terms and definitions in messaging

CPM

Cost Per Mille is a pricing model referring to the cost of 1000 ad impressions. It’s sometimes referred to as Cost Per Thousand (with the “M” standing for ‘mille’ in Latin for 1000). CPM is an important metric for both advertisers and app developers, since it defines how much ad space will cost, and therefore how much developers or publishers will get paid for every 1000 unique impressions. One common way to determine the efficiency of a CPM campaign is to look at click-through rates, or the ratio of clicks an ad receives compared to overall impressions. Unlike other measures such as cost per click (CPC), CPM pricing is ideal for campaigns with a goal of increasing exposure and brand awareness instead of specific user action goals, like installing an app or registering for a service. CPM is also used as part of measuring effective cost per thousand impressions, or eCPM. The advertiser is looking for a specific amount of impressions, or eyeballs, and that is what they pay for. In contrast, eCPM also includes CPM but measures the cost of 1000 impressions in the context of a campaign with a pricing model based on performance. In practice, this means that the cost per thousand impressions is calculated based on how many impressions it takes to achieve a performance goal, like an install, or registration. Calculating CPM requires having some basic data on an ad impressions – such as the total cost of the campaign, as well as the number of impressions it received. To measure CPM, you divide the total cost of the campaign by the number of impressions. The result is then multiplied by 1000, generating the CPM figure. For example, if the total cost to run a campaign is €300, and it receives 5000 impressions. The CPM for the ad would be €60.