What is TV Cost Per Thousand (CPM)?
TV Cost Per Thousand (CPM) is a standard metric used in broadcast media buying to calculate the cost of reaching 1,000 viewers. The term derives from the Latin "mille," meaning thousand. It's expressed as a simple formula:
CPM = (Total Campaign Cost ÷ Total Impressions) × 1,000
For example, if a 30-second spot costs £500 and reaches 100,000 viewers, the CPM would be £5.
Why CPM Matters
CPM is fundamental to media planning and buying decisions in the UK broadcast sector. It allows agencies to compare efficiency across different channels (terrestrial, satellite, cable), dayparts, and time slots objectively. Rather than looking at absolute costs, CPM normalises spending, making it easier to identify value.
This metric is particularly useful when comparing: - Prime time versus off-peak slots - Different TV channels (ITV, Channel 4, Channel 5, Sky, etc.) - Network buys versus regional campaigns - Spot placements versus sponsorships
How It's Used in UK Media Buying
UK broadcasters and media agencies publish rate cards with CPM figures, though actual CPM can fluctuate based on demand, seasonality, and negotiation. Peak periods (Christmas, summer holidays) typically command higher CPMs due to increased competition for premium inventory.
Agencies use CPM data to: - Build media plans efficiently within client budgets - Benchmark campaign performance against historical data - Negotiate better rates with broadcasters - Report on media spend efficiency to clients
CPM vs Other Metrics
While CPM measures reach efficiency, it doesn't account for engagement, frequency, or brand safety. A low CPM on a late-night slot might seem attractive but could miss your target demographic. Savvy planners combine CPM analysis with audience data, viewership patterns, and campaign objectives.
Cost Per Point (CPP) – measuring cost per rating point – is often used alongside CPM for TV planning in the UK, particularly for national campaigns.
Limitations
CPM assumes all impressions have equal value, which isn't always true. A viewer halfway through a programme may be less engaged than one watching from the start. Additionally, CPM doesn't measure outcomes (sales, website visits, brand lift), only media efficiency.
Practical Takeaway
For UK media professionals, CPM is an essential negotiation and planning tool, but it should never be used in isolation. Combine CPM analysis with audience insights, campaign KPIs, and strategic objectives to make informed media decisions.