CPM is the
abbrevation for cost per a thousand ad
impressions. The M in this case should not be
misinterpreted as "million" but comes from the Latin number "M"
In a CPM advertising model ad publisher and advertiser agree upon a fixed
cost for 1000 impressions, which depends on the traffic to
the publishing website, the competitiveness of the
niche and also on other factors. This means
when a website is visited 1000 times with the ad
displayed, the advertiser has to pay the agreed amount, no
matter if the ad was clicked on or not.
Therefore CPM can be a more risky form of paid
advertising compared to CPC (cost per click) models but with a
very good ad design and ad copy, which generates a lot of
clicks, it can be more cost-effective as quite
often CPMs and CPCs within a certain niche are pretty
much in the same price range.
[Cost is from
Latin constare= to be fixed, to cost;
from Latin mille = thousand]