What does cost per thousand impressions (CPM) measure?

Cost per thousand impressions (CPM) is a metric used in advertising to assess the cost of displaying an ad to a thousand viewers. This measurement focuses specifically on the number of times an advertisement is displayed, regardless of whether users interact with it or not. The "thousand" in the name refers to the number of impressions (or displays) rather than any interaction or click. Therefore, the correct understanding of CPM is that it represents a flat rate charged by advertisers for every 1,000 times their ad is shown to users.

In digital marketing, CPM is often used to evaluate the efficiency and cost-effectiveness of ad campaigns, making it easier for advertisers to budget and gauge the reach of their ads across various platforms. It plays a crucial role in helping advertisers decide how to allocate their advertising budgets effectively while maximizing visibility.

The other options do not accurately represent what CPM measures. The cost incurred for social media posts focuses on the actual expenses associated with creating and promoting content rather than just the impressions. The number of times an ad is clicked relates to click-through rates and user engagement, rather than just impressions. Lastly, expenses based on website traffic can encompass various other factors beyond just ad displays and do not specifically measure impressions in the context required for CPM