CPM Formula: Cost Per Thousand Impressions
CPM (Cost Per Mille) is the price you pay for 1,000 ad impressions. "Mille" is Latin for thousand — so CPM literally means "cost per thousand." It's one of the oldest pricing models in advertising, dating back to newspaper and magazine ad buys.
If you're running brand awareness campaigns, display ads, or video ads, CPM is probably the billing model you're working with.
The CPM Formula
CPM = (Total Ad Spend ÷ Total Impressions) × 1,000
So if you spent $300 on a campaign and got 50,000 impressions, your CPM is:
($300 ÷ 50,000) × 1,000 = $6.00 CPM
You can also work backwards to estimate cost:
Total Cost = (CPM × Impressions) ÷ 1,000
At a $6 CPM, 100,000 impressions would cost you $600.
Use our CPM Calculator to crunch these numbers quickly.
How CPM Bidding Works
On most ad platforms, CPM bidding means you set the maximum you're willing to pay per 1,000 impressions. The platform then tries to show your ad to your target audience at or below that price.
There are a few CPM variants you'll encounter:
- Standard CPM — you pay per 1,000 impressions, regardless of whether anyone sees or interacts with your ad.
- vCPM (Viewable CPM) — you only pay when the ad is actually viewable on screen (at least 50% of the ad visible for 1+ seconds). Google Ads and most major platforms support this.
- Target CPM — you set an average CPM target and the platform optimizes bids around that number. Some auctions will cost more, some less.
The platform's auction system still applies — your ad competes with other advertisers targeting the same audience, and your ad quality affects how often it wins.
CPM Benchmarks by Platform
Average CPMs vary significantly depending on where you advertise:
- Google Display Network: $2-10
- Facebook / Instagram: $5-15 (can spike during Q4/holidays)
- YouTube (video ads): $4-15
- TikTok: $3-10
- LinkedIn: $30-80 (premium professional audience)
- Programmatic Display: $1-5 (broad reach, less targeted)
These are rough averages. Your actual CPM depends on your targeting specificity, competition, seasonality, and ad quality. More specific targeting = higher CPM but more relevant audience.
When to Use CPM vs CPC
This is one of the most common questions in ad buying. The answer depends on your campaign goal:
Use CPM when:
- Your goal is brand awareness or reach — you want eyeballs, not necessarily clicks
- You're running video ads or display ads designed to be seen, not clicked
- Your ad has a high CTR — if your ad gets lots of clicks, CPM can be cheaper per click than CPC bidding
Use CPC when:
- Your goal is traffic, leads, or sales — you want people to take action
- You're running search ads — users have high intent and you want to pay for engagement
- Your ad has a low CTR — CPC protects you from paying for impressions that don't convert to clicks
The math: If your CPM is $10 and your CTR is 2%, your effective cost per click is $0.50 ($10 ÷ 20 clicks). If CPC bidding would charge you $1.00 per click for the same audience, CPM is the better deal. But if your CTR drops to 0.5%, that same CPM gives you an effective CPC of $2.00 — now CPC bidding wins.
How to Lower Your CPM
- Broaden your audience. The more specific your targeting, the smaller the pool and the higher the CPM. Test wider audiences with strong creative to see if performance holds.
- Improve ad quality. Platforms reward engaging ads with lower costs. Better creative means better engagement rates, which means the platform serves your ad more efficiently.
- Test different placements. Instagram Stories vs Feed, mobile vs desktop — each placement has different CPM ranges. Don't assume the default is cheapest.
- Avoid peak seasons. CPMs spike during holidays (Q4), major events, and election cycles. If timing is flexible, off-peak campaigns get better rates.
- Use frequency caps. Showing the same ad 10 times to the same person wastes impressions and drives up effective CPM. Cap frequency at 3-5 per week.
What Matters More Than CPM
Low CPM doesn't mean good performance. You can get a $1 CPM showing ads to the wrong people. What matters is what those impressions lead to.
Track your CPM alongside:
- CTR — are people actually engaging?
- Conversion rate — are those clicks turning into customers?
- CPC — what's your effective cost per click from those impressions?
- ROAS — is the whole campaign profitable?
The cheapest impressions aren't always the most valuable ones.
Frequently Asked Questions
It varies by platform and audience. Facebook averages $5-15, Google Display $2-10, LinkedIn $30-80, and niche B2B can exceed $100. Compare your CPM to industry benchmarks for your specific platform, not general averages.
A $15 CPM means you pay $15 for every 1,000 times your ad is shown. If your ad gets 10,000 impressions at a $15 CPM, you'll spend $150 total. Whether $15 is good depends on your platform, industry, and what you're getting from those impressions.
Use CPM when your goal is brand awareness and maximum reach — you want as many people as possible to see your ad. Use CPC when your goal is driving clicks, leads, or sales — you only pay when someone engages. If your ad has a high CTR, CPM can actually be cheaper per click than CPC bidding.
Divide your total ad spend by total impressions, then multiply by 1,000. For example, a $500 spend with 200,000 impressions gives a $2.50 CPM. To estimate cost from a CPM — if a platform charges $20 CPM and you want 100,000 impressions, expect to pay $2,000.
An impression is a single view of your ad. CPM is the cost of 1,000 impressions. One is a unit of measurement (like "miles"), the other is a price (like "dollars per mile"). You track impressions to measure reach and CPM to measure cost efficiency.