CPM
Cost per thousand impressions
What you pay for your ad to be shown a thousand times — the price of reaching an audience, not the result of reaching it.
Formula
CPM = (ad spend ÷ impressions) × 1000
How to read it
- Read it as a market price: it rises with auction density, in seasons, in large cities, and on narrow audiences everyone else wants too.
- Rising CPM with a steady cost per order is not a problem. Falling CPM with a rising cost per order is.
- Comparing it between two markets — Egypt and Saudi Arabia, say — tells you nothing about campaign quality.
The common mistake
Chasing a cheap CPM by broadening the audience. You do get cheaper impressions, and then find the orders got dearer: cheap reach to people who do not buy costs more than expensive reach to people who do.