CPM stands for "Cost Per Thousand Exposures". The use of CPM is very inaccurate -- it always has been -- as everybody cheats on how many people actually see the ad. The standard rule of thumb is to sway that the average car carries two people, so a 20,000 24 hour traffic count means 10,000 cars going each way over 24 hours x 2 people per car = 20,000 views per day each way. But, obviously, there are flaws with this argument. First, a 24 hour count would only work if the sign was lighted 24 hours, which they are normally not. However, the traffic after midnight (which is when most lights turn off) is very low, so it is not entirely mathematical on how much less traffic you would have. And, obviously, nobody knows how many people are actually in each car nor how many actually look at the sign. But before you think that billboard companies use bad data, you should check out the CPM numbers that newspapers and magazines use. They go by magazines printed and shipped -- but there's no guarantee if anyone reads the magazine or sees the ad, or how many people read it. The bottom line is that CPM is very flawed and not much of a help except for basic apple to oranges macro differences in cost.
The only real way to figure out the correct rate is, as you are doing, trying to sell the space and getting customer feedback. Also, remember that the "quality' of the traffic is as important as the "quantity" of the traffic. Advertisers would rather hit fewer upscale customers than a ton of customers with no disposable income.