Cost per mille (CPM) is a widely used metric in digital advertising that refers to the amount that advertisers pay for every one thousand ad impressions served. Ad views are defined as the number of times an ad is displayed on a web page or an app store. CPM is often used in programmatic ads and is a popular pricing model in online advertising.
In case of app marketing, the CPM pricing model is a better choice if you’re a big mobile publisher — as you are charged a fixed rate based on the number of ad impressions received by an ad placement. A mobile advertiser will also find a CPM campaign useful for driving brand awareness.
This marketing term also goes by as “cost per thousand”. The word "mille" means "a thousand" when translated from the Latin language.
When it comes to Apple Search Ads, CPM stands for the amount app marketers pay for a thousand impressions on the App Store.
Previously, the CPM model played a huge part in Apple Search Ads. Out of all pricing models, it was the one used for Search tab campaigns — the ones that enable you to promote your app right within the App Store’s Search tab.
However, there was a shift in pricing models for this type of campaigns, and the CPM advertising was replaced with the CPT one.
While you can no longer create CPM campaigns, you can still see and track the average CPM along the reporting metrics in an Apple Search Ads Advanced account.
Several factors can influence the CPM rate, including ad placement, targeting, ad format, and the target audience. An ad placement can have a significant impact on CPM, with ads that appear on high-traffic sites typically having higher CPM rates.
The target audience can also impact CPM. Ads that target a broad audience may have higher CPM than those that target a specific audience due to the increased competition for impressions.
There is no universal benchmark for a "good" CPM rate as it can vary depending on the industry, platform, and campaign objectives.
Since CPM campaigns are very often focused on promoting a brand rather than encouraging user engagement with the ad, assessing their performance can be challenging.
One way to do so is to examine the click-through rate (CTR), which measures the ratio of clicks an ad receives relative to its total impressions. This helps to get a rough idea of how successful the ad was in attracting users.
Calculating CPM is a simple process that involves dividing the total cost of an ad campaign by the number of impressions gained, then multiplying the result by one thousand.
To calculate the CPM metric, use the formula below:
CPM = (Total cost of ad campaign / Number of impressions generated) x 1000.
Now let’s put the cost per thousand calculations into practice.
For example, if an advertiser pays $500 for an ad campaign that generated 100,000 impressions, the CPM would be:
CPM = ($500 / 100,000) x 1000 = $5.
As we mentioned above, tracking CPM can be difficult. This is why the best way is to make use of various analytical solutions (like SplitMetrics Acquire) that provide advertisers with valuable insights on the number of ad impressions served, click-through rate, and other metrics to evaluate CPM campaigns importance.
To decrease CPM, marketers should focus on improving their ad targeting and ad format — as well as get a clear understanding of how their chosen platforms work. By targeting the right audience and serving engaging ads in the right format, advertisers can increase engagement rates and generate more clicks, leading to lower CPM rates.