Another web pricing measurement besides the Cost-Per-Click (CPC) metric is that of Cost per Thousand (CPM). With the “M” representing the roman numeral for 1,000 (mille), this metric is measured in the basis of impressions. The definition that Facebook provides for…

Cost Per Thousand (CPM) is
“The average cost you’ve paid to have 1,000 impression on your ad.”

The CPM metric is most effective to measure campaigns that seek:
– to elevate brand awareness
– or delivery a specific message

Website publishers particularly favor CPM because marketers pay based on the CPM rate regardless of actual impact or click-through-rate such as making a purchase or installing an app. This certainly makes CPM seem less favorable compared to CPC. Nonetheless, CPM is still a crucial metric for marketers as it can provide key insights and is able to measure other aspects of a campaign’s impact.

For example, Levi was one of the first
brands that utilized Instagram as a social media marketing tool to raise brand awareness. After a nine-day period campaign, Levi reached 7.4 million consumers in the 18 to 34 age range. With 155,000 followers at the time, Levi was able to reach an audience that was 47 times bigger. Using CPM as its metrics, Levi would be able to benchmark the cost for its Instagram campaign versus campaigns that run on other platforms, a feature that CPC cannot directly compare.

To calculate the amount that Levi had to pay Instagram, divide 7.4 million by 1,000 and multiple by the CPM rate.

Further Reading:
– CPM vs CPC: Which Should You Use For Facebook Ads?