CPM refers to Cost per mille and the term is used in online advertising. The mille used in the term means ‘thousand’ in Latin and thus the term refers to cost per thousand impressions. The term is basically used to measure cost of a particular advertisement campaigns. In this case the advertiser needs to pay a certain amount of money only when 1000 impression of the particular advertisement has been viewed by different users. It is also referred to as
CPI which stands
for Cost per impression. This kind of marketing campaign is generally
associated with banner ads, email marketing and with contextual advertising.
Under this advertisement model, the ad appears on a webpage and when a user clicks on it then the advertiser needs to pay a certain amount to the site that advertised the link. Since the cost of a single click is sometimes unaccountable, the cost is estimated for a thousand clicks. For instance, if the CPM is 1 $ then the advertiser needs to pay 1$ to the advertiser when 100o people have clicked on the ad link. Most of the advertisers use this model and find it to be effective. A flat rate system is used in this kind of ad where the amount is pre-fixed by the advertiser and the website.