Published · By Ailumic

What is a CPM in advertising?

CPM is the price of showing an ad one thousand times — “cost per mille”, mille being Latin for thousand. Ad space is priced this way because a slot is sold per viewing, and a thousand viewings is a convenient amount to quote. A lower CPM means each viewing cost less; it says nothing about whether anyone clicked.

Why ad space is priced per viewing

In a real-time auction the thing sold is one viewing of one slot. A single viewing costs very little, so prices are quoted per thousand of them, the way fuel is priced per gallon rather than per drop. “Mille” is simply the Latin word the industry kept; “cost per thousand” says the same thing.

CPM, CPC and CPA

Three sets of letters you will meet. CPM is the price per thousand viewings. CPC is the price per click. CPA is the price per action — a sign-up, a purchase, a booking. Some platforms let you choose which one you pay by. Underneath, every slot is still bought per viewing in an auction; a platform that charges you per click is carrying the cost of the viewings nobody clicked and pricing that into the click.

What moves the price

Nobody sets a CPM; the auction does, one viewing at a time. It rises and falls with:

  • The placement. A full-screen slot inside an app is one thing; a small banner beside an article is another.
  • Who is being reached. A city or a kind of app that many advertisers want to be seen in costs more than one that few do.
  • The time. The weeks before a holiday are more crowded than the weeks after, and evenings differ from mornings.
  • How many others are bidding for the same viewing at the same moment.
  • The app or page itself — its quality, and what kinds of ads it allows.

From a price to a budget

Divide your budget by the price per thousand viewings and multiply by a thousand, and you have roughly how many times your ad can be shown. Treat it as a rough estimate: the price moves during the run, so the real count is in your report afterwards, not in the arithmetic beforehand. Our guide on how much to spend starts from the other end — from what you can afford to learn.

Why Ailumic publishes no price list

Because the price is set in the auction, not by us, and it differs by placement, area and time. A single figure on a page would read as a rate card for a service that has not run your campaign, and it would be wrong by the time you read it. What we can promise instead is how you see the price. The price is in front of you before you confirm, and nothing runs until you do. You pay only for ads that are actually shown. Start with what you have — there is no minimum.

Guides

  • How do real-time ad auctions work?

    Every ad slot is sold in an auction that lasts a fraction of a second. Who bids, what decides the winner, who pays, and what it means for a small budget.

  • Banner, native or full-screen: which ad format should a small business choose?

    A banner runs beside the content, a native ad sits in the feed, a full-screen ad fills an app between pages. How to pick one for the ad you have.

  • How much should a small business spend on ads to start?

    Size a first ad budget by what you can afford to learn from, not by a rule of thumb: enough to run a full week, small enough that a lesson with no sale is fine.

  • How do I read an ad report?

    Read an ad report in order: times shown, clicks, cost, then where and when it ran. What the click-through rate tells you, and what to change next.

  • How long should an ad campaign run?

    Run a first ad for a full week and no longer than it takes to learn one thing. Why a week, why not months, when to stop early and when to add budget.

  • What is programmatic advertising?

    Programmatic advertising is ad space bought by software, one viewing at a time, in an auction. What it replaced and what it means for a small business.

  • What is a DSP, or demand-side platform?

    A DSP is software that bids for ad space on an advertiser’s behalf. How it differs from an ad exchange and a supply-side platform, and where Ailumic fits.

  • How do ads in mobile apps work?

    An app sets aside ad slots, sells each one in an auction as it is about to appear, and draws the winning ad. What an advertiser chooses and sees afterwards.

  • How do I write an ad for my small business?

    Write one message for one kind of person, say what to do next, and cut the rest. How to fit it to a banner, native or full-screen ad, and when to rewrite.