Reference library · Inventory pricing
CPM (Cost Per Mille)
CPM (Cost Per Mille) is the price paid per one thousand ad impressions. It converts unequal spend and unequal delivery across formats, placements, and sellers into a single comparable rate, letting a buyer rank inventory by cost efficiency.
Formula
Worked example
A video placement delivers 2,500,000 impressions for €18,750: CPM = (18,750 / 2,500,000) x 1000 = €7.50. A display placement on the same plan delivers 3,000,000 impressions for €9,000: CPM = (9,000 / 3,000,000) x 1000 = €3.00. On a pure cost-per-thousand basis the display line is the more efficient buy, so the planner shifts budget toward it unless video's quality metrics justify the premium.
How it is used
Buyers use CPM to shortlist and negotiate inventory before layering in quality checks like viewability, completion rate, and fraud rate. It is also the common currency for converting a budget into expected reach or for setting a floor/ceiling in programmatic deals. The recurring mistake is comparing CPMs across sellers whose impression counts are defined differently, so a cheaper CPM looks like a better deal when it is really a cheaper impression.
The common mistake
Only compare CPM figures after confirming both sides count impressions the same way (served vs. viewable), since a lower CPM built on served impressions is not actually cheaper than a higher CPM built on viewable ones.