Cost per thousand, or CPM is a way of measuring the cost of displaying an advertisement on web page. This is a different system than cost per click because it has to do with the number of times an advertisement is viewed on a web page, and not how many times the link is clicked. There is a set price range for every time the ad is viewed a thousand times. If the CPM for a certain advertisement is fifty dollars, then every time the ad is viewed one thousand times, the advertiser is charged fifty dollars. CPM stands for cost per mille, mille being the Latin word for thousand, and the original term that was used before cost per thousand was adopted as the main term for this type of advertising measurement.
The cost per thousand style of measuring the price of advertising is used not only online, but also in television, radio, newspapers, and magazines. Many advertisers prefer to think of the price of advertising this way to decide if the ads are cost effective for the company or not. Purchasing advertising space at cost per thousand can also be more economical than traditional cost per click or cost per action rates, and depending on where the advertisement is placed, can reach more people than other forms of paid inclusion.
Choosing popular keywords and monitoring the amount of product or service sold during a period of paid inclusion is part of evaluating the effectiveness of cost per thousand. Rather than calculating the total cost of the advertising campaign, cost per thousand allows the advertising company to discover if the over-all costs are paying off in smaller chunks. It can determine whether using cost per thousand for the particular paid inclusion needs of the company is working, or whether some other method would be more effective.