CPM

(Cost Per Thousand)

 

When web advertisements are priced purely on the basis of how many times they are shown (i.e., not on the number of clicks, number of leads, etc.), the most common pricing method is CPM, the accepted abbreviation for "cost per thousand".

Hence, if a rate card offers a price of $5 CPM for banner ads, then the price for 100,000 exposures would be $500. This is calculated by dividing the total number of exposures (100,000) by 1000 (yields 100) and multiplying by the price ($5).

While many advertisers prefer performance based ad billing (clicks, leads, etc.), CPM pricing may be appropriate for image or brand awareness campaigns, or other situations where it might be difficult or impossible to quantify a performance measure.

 

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