Cost per Thousand (CPM)

Cost per Thousand (CPM) is the cost to reach one thousand people or households via a given advertising outlet or medium. (M is the Roman numeral for 1,000.)

CPM = cost / (target audience / 1,000)

or

CPM = cost x 1,000 / target audience

How You Do It

Media planners calculate CPM to estimate the efficiency of a campaign and to compare the costs of various media. But in order to be reasonably accurate, the comparison must involve media that reach roughly the same audience.

Resources available to help in your calculation include rate cards from specific outlets and directories such as Cision and SRDS and Alexa.

Strengths

After the fact, it is a measurement for reporting and analysis. It is a permanent record of where your advertising messages went.

This is a fundamental navigational metric. It is a coarse measurement of the cost of approaching your target audience. It is an easy way to compare the efficiency of different media; for example, television versus print.

Weaknesses

By itself, it provides no analysis – it is primarily for budgeting. Media planners use it as one of their planning tools.


Return from Cost per Thousand to Advertising Metrics


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