Payment and models

CPM (Cost Per Mille)

Also called Cost Per Mille, Cost Per Thousand, price per 1,000 impressions, cost per thousand impressions.

Short answer

CPM (Cost Per Mille) is the price for 1,000 impressions of an ad. The advertiser pays for exposure – not for clicks and not for sales. Mille is Latin for thousand, and the unit is always 1,000 impressions.

CPM is the basic unit of media buying. The buyer pays to be seen by a certain number of eyes, and neither clicks, visits nor orders enter the calculation. The model is used for building awareness, where the aim is for a message to reach widely and where the effect can only be measured in search volume or sales long after the campaign.

In affiliate marketing, you meet CPM in two places: when an affiliate sells banner space directly to an advertiser outside a network, and as a unit of calculation, where commission is converted into a price per thousand and compared with a fixed banner sale in the same placement.

Not every impression is equal. That is why the concept of a viewable impression exists, which the IAB and MRC define as at least 50 % of the ad’s pixels on screen for at least one continuous second for display and two seconds for video. A CPM price without a definition of the impression cannot be compared.

How it is calculated

CPM = (total ad price ÷ number of impressions) × 1,000

total ad price: the amount the advertiser pays for the placement in the period, excluding VAT
number of impressions: the number of times the ad was shown – preferably counted as viewable impressions

Example

Ad price: DKK 4,500
Impressions: 300,000
CPM: DKK 15.00

A CPM of DKK 15 means that each individual impression costs 1.5 øre (DKK 0.015) – the figure only becomes meaningful when it is set against what those impressions ended up being worth.

eCPM – CPM worked out backwards

eCPM (effective CPM) translates any earnings model into a price per thousand: eCPM = (total earnings ÷ number of impressions) × 1,000. An affiliate who earns DKK 900 on 60,000 views of an article has an eCPM of DKK 15.00.

It is the only way to compare apples and oranges. Whether a placement should be used for an affiliate link, an ad or a sold banner, the highest eCPM decides.

Why CPM is rarely used in affiliate programs

Affiliate marketing is built on the advertiser paying for a result. CPM shifts all the risk the other way: the advertiser pays the same whether the impressions come from a reader ready to buy or from an auto-refreshing page in a forgotten browser tab. That is why CPM appears in affiliate programs more often as a unit of analysis than as a form of agreement.

CPM vs. CPC

Aspect	CPM	CPC
Payment is for	1,000 impressions	each click
Risk is carried by	the advertiser	the publisher
Used for	awareness and reach	traffic to a specific page
The link between them	CTR decides what the impressions turn into	CTR is already priced in

CPM is cheapest when the ad actually gets clicked – CPC is safest when it does not.

How it goes wrong

01
Served confused with seen
An ad that loads below the fold is counted as shown in many systems, even though nobody has seen it. Deals without a viewability requirement pay for pixels, not attention.
02
CPM rewards volume, not intent
Payment depends on impressions alone, which encourages more page views rather than better ones. Auto-refreshing pages, infinite scroll and bot traffic all push the number up without raising the value.

Frequently asked questions

What does CPM mean in marketing?

CPM stands for Cost Per Mille and means the price per 1,000 impressions of an ad. Mille is Latin for thousand. If an advertiser pays DKK 4,500 for 300,000 impressions, the CPM is DKK 15.

What is the difference between CPM and eCPM?

CPM is the agreed price per 1,000 impressions. eCPM is the effective price per thousand that you work out afterwards by dividing actual earnings by the number of impressions and multiplying by 1,000. eCPM can be calculated for any model, including commission from affiliate links, and is used to compare placements across different ways of earning.

Is CPM an affiliate model?

Rarely. Affiliate programs pay for a result – a sale or a lead – while CPM pays for exposure with no requirement for an action. Affiliates most often meet CPM as a unit of calculation when comparing the value of a placement, or when selling banner space directly to an advertiser.