CPM

What it means

CPM is the price of a thousand ad impressions whether or not anyone clicks. It suits campaigns aimed at reach: launching a brand, display network work or retargeting.

Buying on CPM puts the risk of showing to the wrong people on the advertiser. On CPC the system carries that risk, which is why a click price is derived from how often it expects a click.

Unlike CPC, CPM says nothing about how many people actually saw the ad. An impression counts even when the ad loads at the bottom of a page the visitor never scrolls to. When buying reach, viewability and frequency are therefore tracked too, meaning how many times the same person saw the ad.

How it works in practice

For B2B services with a decision cycle of weeks, CPM makes sense alongside retargeting and e-mail. The first contact builds awareness; the order arrives through another channel.

A reach campaign is not measured in clicks but in the rise of direct and branded demand. If nobody tracks that, the campaign looks like a failure even when it works.

Channels bought in different ways can be compared by conversion: CPM divided by the number of clicks per thousand impressions gives a cost per click. That shows whether a reach campaign is dearer or cheaper than a performance one, and we prepare this comparison for clients in the monthly reporting of marketing costs.

What to watch out for

A cheap CPM is cheap because the impressions sit in poor placements. Without excluding them the budget buys advertising nobody actually saw.

High frequency on a small audience makes a campaign dearer and harms the brand. When the same ad keeps reaching the same people, CPM stays low but ROAS falls and people start linking the brand with pestering, so frequency needs a cap.