What is CPM?
Cost Per Mille (thousand impressions) – what you pay for 1,000 ad views.
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How CPM Works
CPM, or Cost Per Mille, represents the price an advertiser pays for one thousand impressions of their ad. It's one of the most common pricing models in digital advertising, especially for brand awareness campaigns where reach matters more than immediate conversions.
CPM is calculated by dividing the total campaign cost by the number of impressions, then multiplying by 1,000. For example, if you spent $500 and received 100,000 impressions, your CPM would be $5. Lower CPMs generally indicate more efficient ad delivery, though they don't guarantee quality engagement or conversions. When optimizing for CPM, focus on audience targeting, ad quality, and bid strategies that balance reach with cost efficiency.
Frequently Asked Questions
What is CPM?
Cost Per Mille (thousand impressions) – what you pay for 1,000 ad views.
CPM, or Cost Per Mille, represents the price an advertiser pays for one thousand impressions of their ad. It's one of the most common pricing models in digital advertising, especially for brand awareness campaigns where reach matters more than immediate conversions.
What does CPM stand for?
Why is CPM important?
CPM is the foundation metric for brand awareness campaigns and helps you compare the cost-efficiency of different platforms and ad formats. Understanding your CPM reveals whether you're paying competitive rates—for example, TikTok might offer $5 CPMs while LinkedIn averages $30+. Tracking CPM trends over time shows whether your targeting is improving or if ad fatigue is setting in, directly impacting your marketing budget efficiency.
How do you calculate CPM?
CPM = (Total Ad Spend ÷ Total Impressions) × 1,000. For example, if you spent $2,000 and received 400,000 impressions, your CPM is ($2,000 ÷ 400,000) × 1,000 = $5.00 per thousand impressions.