What does CPM stand for, and why is it important?

CPM stands for Cost per Thousand Impressions. This metric is important because it provides advertisers with a clear understanding of how much they are paying for every thousand times their ad is displayed to users, regardless of whether those users engage with the ad. It is a key indicator of cost-effectiveness when running digital advertising campaigns, allowing marketers to compare the costs of different advertising options and make more informed budgeting decisions.

Using CPM helps advertisers assess the reach of their campaigns and evaluate the efficiency of their media buys. A lower CPM indicates that an advertiser is able to reach a larger audience for a lower cost, which is often a primary goal in digital advertising. Therefore, understanding and calculating CPM can dramatically influence the strategy and effectiveness of advertising efforts.