# Cost per thousand: what is in the denominator?

Subject: Advertising and Public Relations

Exam: TEE

Reader: https://deep-learning-study-room.vercel.app/apr/#tee/practice/numbers/cpm-meaning

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Extra drills; no claim that these exact questions or allocated marks appeared in TEE

**Definition.** CPM (cost per mille) or CPT in these notes expresses the cost of 1,000 specified exposure opportunities. “Mille” means thousand, not million.



$$
\text{CPM}=\frac{\text{cost}}{\text{impressions}}\times1000
$$



If the question supplies a publication audience rather than measured ad impressions, describe the result as cost per thousand audience opportunities under that assumption. For a target CPM, use target-audience impressions rather than all impressions. Always identify which cost and audience are being compared.

### Practice question. Explain cost per thousand and one limitation of using it for media selection. [2 practice marks]

#### Answer

Cost per thousand divides the advertising cost by the number of specified exposure opportunities and multiplies by 1,000. It makes differently sized media options comparable on delivery cost. However, a lower CPM does not prove better targeting, attention, creative suitability or conversion.

#### Illustrative example · Cheap but irrelevant placement

A low-cost placement that mainly reaches people outside the service area can be less useful than a higher-CPM placement among eligible buyers. Compare like audiences and objectives.