Hi Joseph,
Inventory is just how much you have available. In this case, they're asking how much ad space, and/or how many ad impressions, you currently have available (unsold).
So if you're getting 100,000 pageviews each month, and you have one advertiser who's getting 25,000 views each month from you, then your available inventory is 75,000 pageviews.
The CPM rates are referring to every 1000 views. So for banners, they're offering to pay you 25 cents for every 1000 views, and for pop ups/unders they're offering to pay you $1 for every 1000.
Hope that helps,
Kathy
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