What is CPM and how is it used in planning?

What is CPM and how is it used in planning?

• A. Cost per mille.
• B. Cost per click.
• C. Cost per mille (CPM) equals cost per 1000 impressions; used to compare efficiency across media channels and decide where to allocate spend.
• D. Cost per engagement.

Answer: (C)

CPM stands for cost per mille, with “mille” meaning thousand. It’s the cost to deliver 1,000 impressions, where an impression is simply a served ad view. In planning, CPM is used to level the playing field when you’re comparing different media channels that may have different pricing structures. By looking at how much you pay for 1,000 exposures, you can judge which channels deliver reach most cost-efficiently and decide where to allocate budget to maximize impressions within the given spend.

Keep in mind CPM measures exposure, not action. It tells you about reach efficiency, but for outcomes like clicks, sign-ups, or sales you’ll want to bring in other metrics (like CTR, conversion rate, CPA) to get the full picture.