Cost Per Thousand (CPM)

Unique from most other online advertising price models, with Cost Per Thousand (CPM) you pay per impression: in this case, you pay a set amount for every thousand impressions your ad makes.

An impression occurs every time your ad is displayed on a computer screen. You pay for each impression regardless of whether or not someone clicks on it.

Oftentimes, Cost Per Thousand can be a remarkably cost-effective approach, since you pay so little for each impression. If you can average a reasonable clickthrough rate (usually between 1-2 percent), you usually end up paying less for each click than with a typical Pay Per Click (PPC) pricing model (depending on the CPM rate you're charged for each thousand impressions).

Other online advertising payment models only charge you for each "successful performance" of ads. These payment models (including PPC, CPL, CPA, and others) only charge you when a certain desirable action takes place as a direct result of your ad, such as when someone clicks on your ad, or fills out a form, or makes a purchase (this is known as Pay For Performance advertising). Cost Per Thousand (CPM) can be more of a gamble, but you could save money by opting for the CPM method.

CPM pricing is available on numerous online ad services. If you opt for Cost Per Thousand, make sure you do targeted advertising (so impressions only show to people within the geographical area you are seeking business, or when people type in specific keywords), since each impression counts more than with typical Pay Per Click pricing models.