Calculating Cost Per Thousand (CPM)

The main standard in the Advertising Industry for comparing costs or determining what you are actually paying per customer is called CPM, or Cost Per Thousand.

Calculating CPM is easy to do, but as you'll find with some sources of advertising, they will try and make it difficult for you to do so or will try and pass it off as unimportant. However, we believe that being open and honest about CPM is the only way to ensure customer satisfaction and therefore loyalty.

First, you need to know exactly how much you are paying for the advertising itself, minus the cost to create, setup or edit your ads. Second, you need to know how many viewers or readers or listeners will actually see, read or hear your ad. Be careful not to confuse readers with circulation if you are comparing print advertising costs or make sure to use average listeners or viewers (for radio & TV), not their peak numbers. Finally, take the actual cost of advertising divided by the total number of readers, listeners or viewers, divided by one thousand.

A print advertising example:

Actual Cost of Advertising (1/2 page): $600

Number of actual readers (circulation, not households): 30,000

CPM = $600 / (30,000 / 1,000)

Cost per Thousand (CPM) readers = $20.00

For a specific look at our advertising rates, click here.