What is the formula for calculating CPM?

The correct approach to calculating CPM, or Cost Per Mille (the cost per 1,000 impressions), is to take the total cost of the ad and divide it by the total number of impressions, then multiply that result by 1,000. This formulation allows advertisers to understand how much they are spending to reach a thousand viewers.

Using the structure of the correct formula, you can see how the cost of the ad relates directly to the quantity of impressions provided. This calculation is fundamental in advertising as it helps in evaluating the cost-effectiveness of different ad placements and strategies. By using this understanding, advertisers can make more informed decisions on budgeting and ad spending based on their reach and audience engagement.

Other options present a misunderstanding of the relationship between costs and impressions. For instance, simply dividing impressions by cost or modifying the structure with addition or multiplication inappropriately doesn't capture the essence of what CPM represents, leading to incorrect calculations for marketing expenditures.