What does CPM stand for, and what does it measure?

The correct answer emphasizes that CPM stands for "Cost per Mille," which refers to the cost for displaying an ad to one thousand users. This metric is widely used in advertising to assess how much an advertiser must pay to reach a thousand views or impressions of their advertisement.

Understanding CPM is vital for media buyers and advertisers because it provides insights into the potential reach of their campaigns and helps in budgeting advertising expenditures effectively. A lower CPM indicates that the advertiser can reach a larger audience with their budget, which is a significant consideration in media buying strategies.

Recognizing CPM's role in the advertising ecosystem allows marketers to compare the efficiencies of different ad placements and formats. This measurement is particularly relevant for campaigns focusing on brand awareness or visibility, where the emphasis is on impressions rather than direct clicks or engagements.