Money & metrics · also called cost per thousand, cost per mille
CPM (cost per mille)
CPM is the price of one thousand ad impressions; "mille" is Latin for thousand.
CPM is how display, social and video ads are usually priced: the advertiser pays for every thousand times the ad is shown, whether or not anyone clicks.
Search arbitrageurs care about CPM because it is the hidden ingredient in their click price. On social platforms and many display networks the auction is run in impressions. What the buyer experiences as CPC is simply CPM divided by the number of clicks each thousand impressions produces. Two levers therefore lower the cost of a visitor: paying a lower CPM (cheaper audience, cheaper hours, cheaper country) or earning a higher CTR with a better creative.
CPM also explains seasonal pain. When big brands flood the auctions in late November and December, CPMs rise for everybody, and an arbitrageur's click costs rise with them even though nothing about the campaign changed (see Q4 effect). The mirror-image metric on the earning side is RPM: revenue per thousand page views.
An example
For example, at a $12 CPM and a 4% CTR, 1,000 impressions yield 40 clicks, so CPC = $12 / 40 = $0.30. Lift CTR to 6% and the same $12 buys 60 clicks at $0.20 each.
Related terms
CPC (cost per click)
CPC is the price paid for one click on an ad; in search arbitrage it is what the arbitrageur pays a traffic source for each visitor.
CTR (click-through rate)
CTR is the percentage of people who click something after seeing it, calculated as clicks divided by impressions.
eCPM (effective CPM)
eCPM converts any pricing model into an equivalent price per thousand impressions, so traffic bought or sold in different ways can be compared.
RPM (revenue per mille)
RPM is revenue earned per thousand units, usually page views, sessions or ad impressions: revenue divided by the count, multiplied by 1,000.
Impression
An impression is one instance of an ad being displayed to someone, whether or not they click it.
Q4 effect
The Q4 effect is the rise in advertising prices and budgets from October to December, driven by holiday shopping, followed by a sharp drop in January.