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All terms
Cost per Mille (Cost per Thousand Impressions)

CPM

CPM (Cost per Mille) is the cost of 1,000 ad impressions. Mille is Latin for thousand. It is calculated by dividing total ad spend by the number of impressions and multiplying by 1,000, and it shows how expensive it is to reach an audience on a given platform.

CPM is the price of attention. Most social and display platforms, including Meta, TikTok and YouTube, run auctions where advertisers effectively compete for impressions, so CPM reflects how much demand there is for the audience you are targeting at that moment.

How Do You Calculate CPM?

The formula is: CPM = (ad spend / impressions) x 1,000.

If you spend $500 and your ads are shown 100,000 times, your CPM is $5. That means every 1,000 impressions cost you $5, regardless of whether anyone clicked.

What Drives CPM Up or Down?

  • Audience competition: narrow, high value audiences, such as business owners or high income segments, attract more bidders.
  • Seasonality: CPMs usually rise in peak shopping periods like November and December, when many brands bid for the same people.
  • Placement and format: video, premium placements and certain countries cost more per thousand impressions.
  • Ad quality: platforms reward ads people engage with, which can lower the effective price you pay.

CPM vs CPC vs CPA

CPM measures the cost of being seen, CPC the cost of a click, and CPA the cost of a result such as a purchase. They are linked: CPC = CPM / (1,000 x CTR). A cheap CPM with a very low click-through rate can still produce an expensive click, so CPM alone never tells you whether a campaign is efficient.

When Does CPM Matter Most?

CPM is the main efficiency metric for awareness and reach campaigns, where the goal is to be seen by as many of the right people as possible. For conversion campaigns, treat CPM as an early warning signal: a sudden rise often explains why CPA went up even when nothing else changed.

Frequently asked questions

What does CPM stand for?+

CPM stands for cost per mille, the cost of 1,000 ad impressions. Mille means thousand in Latin.

How do you calculate CPM?+

Divide total ad spend by total impressions and multiply by 1,000. For example, $500 for 100,000 impressions is a $5 CPM.

Is a lower CPM always better?+

No. A low CPM can come from low quality placements or audiences that never convert. Judge CPM together with CTR, CPC and CPA.

Related terms

CPC

Cost Per Click

CPC (Cost Per Click) is the amount an advertiser pays each time someone clicks their ad. It is the core pricing unit of pay-per-click advertising on platforms like Google Ads and Meta Ads, and it directly affects how far a media budget stretches.

CTR

Click-Through Rate

CTR (Click-Through Rate) is the percentage of people who click on a link, ad, or search result after seeing it. It is calculated by dividing clicks by impressions and multiplying by 100.

CPA

Cost per Acquisition (Cost per Action)

CPA (Cost per Acquisition, also called Cost per Action) is the average ad spend needed to get one conversion, such as a purchase, sign-up or booked call. It is calculated by dividing ad spend by the number of conversions.