What Is CPM (Cost Per Mille)?
CPM stands for cost per mille, where mille means thousand. It is the price an advertiser pays for one thousand impressions of an ad, meaning one thousand times that the ad is displayed. CPM is a standard way to buy and compare advertising across websites, social platforms, video, audio and traditional media.
The formula
CPM = (total cost divided by total impressions) multiplied by 1,000.
If an advertiser spends $500 and the ad is shown 200,000 times, the CPM is $2.50. Publishers use the reverse, to estimate revenue: impressions divided by 1,000, multiplied by the CPM.
How it compares with other pricing models
| Model | You pay for | Best suited to |
|---|---|---|
| CPM | Impressions | Awareness and brand campaigns |
| CPC | Clicks | Driving traffic |
| CPA or CPL | Actions or leads | Direct response goals |
| CPV | Video views | Video campaigns |
Choice depends on the goal. For awareness, CPM is common. For conversions, cost per click or acquisition may be a better measure of value.
What affects CPM
- Audience: reaching valuable or narrowly targeted audiences costs more.
- Platform and placement: premium sites and prime positions cost more.
- Format: video and rich media often have higher CPMs than simple banners.
- Season and demand: prices rise during busy periods such as holidays.
- Competition in the ad auction.
- Quality and relevance of the ad.
- Region and device.
Interpreting CPM
A low CPM is not necessarily better. It might reflect low-quality placements or inattentive audiences. Compare the CPM with outcomes such as clicks, conversions and brand lift. Metrics such as viewability and fraud checks are also important.
For creators and publishers
Many platforms pay creators a share based on views and CPM, though rates vary widely and change. Understanding CPM helps you evaluate advertising revenue and sponsorship offers.
For students
CPM appears in digital marketing courses and campaigns. Practice by calculating CPM for sample budgets, and compare it with CPC to see the trade-offs.
Common mistakes
- Focusing on cheap impressions and ignoring quality.
- Confusing impressions with unique reach.
- Ignoring frequency, which counts repeated exposure.
- Not tracking results beyond delivery.
Related terms
See click-through rate, impressions vs reach, conversion rate, sponsored content and funnel.
Frequently asked questions
What does CPM stand for?
Cost per mille, where mille is Latin for thousand. It means the price paid per 1,000 impressions of an ad.
How is CPM calculated?
Divide the total cost by the number of impressions, then multiply by 1,000. If a campaign costs $200 and gets 80,000 impressions, the CPM is $2.50.
Is CPM the same as CPC?
No. CPC, cost per click, charges for each click. CPM charges for exposure, whether or not anyone clicks.