What is CPM (cost per thousand impressions)
Also known as: Cost per Mille, cost per thousand impressions
CPM (cost per mille, or cost per thousand impressions) is what it costs to show an ad a thousand times. "Mille" is Latin for thousand. It is both a metric, for comparing the price of attention across channels, and a pricing model, where the advertiser pays for the display rather than the click.
CPM = (total cost ÷ number of impressions) × 1,000
An impression is each time the ad is shown. The same person can generate several impressions, which is why impressions are not the same as reach.
A clothing brand spent $2,400 on a campaign that had 300,000 impressions. CPM was ($2,400 ÷ 300,000) × 1,000 = $8.
If those ads had 3,000 clicks, clickthrough rate was 1% and cost per click was $0.80. CPM tells you what it cost to show up; what happens next depends on the ad and the page.
CPM as a metric and as a pricing model
As a metric, CPM compares the price of showing up in different places: a heavily contested audience has a high CPM, a broad, uncontested one has a low CPM. Every campaign has a CPM, even those billed per click.
As a pricing model, the advertiser pays per thousand displays, whether anyone clicks or not. It makes sense when the goal is to be seen: launches, brand, recall.
Viewable CPM (vCPM)
Not every impression is seen: the ad may load at the bottom of a page the person never scrolls to. That is why viewable CPM exists. According to Google Ads Help, on the Display Network vCPM bids ensure advertisers only pay when the ad could be seen, and existing CPM bids are converted to vCPM automatically.
For anyone buying reach, it is the fairer model: you pay for possible attention, not for a display nobody had a chance to see.
When to buy on CPM
- Product or brand launches, when the goal is for many people to see it.
- Recall retargeting, for people who visited the site and have not come back.
- Video and reach display, where the click is not the main measure of success.
- Do not buy on CPM when the goal is direct sales and there is enough volume to optimize for conversions: per-click pricing or conversion bidding usually performs better.
Why a low CPM is not a win
A low CPM may mean an uncontested audience, sometimes because nobody wants that audience. It can also come from low-quality placements, where the ad appears but is not noticed.
CPM has to be read with what comes next: clickthrough rate, cost per conversion and, for brand campaigns, measured recall. On its own it only says what it cost to appear.
Frequently asked questions
What does CPM stand for?
CPM stands for cost per mille, cost per thousand impressions. Mille is Latin for thousand. It is what it costs to show an ad a thousand times.
How do you calculate CPM?
Divide total cost by the number of impressions and multiply by one thousand. $500 and 100,000 impressions is a CPM of $5.
What is vCPM?
Viewable CPM. In Google Ads, on the Display Network, advertisers pay only for impressions where the ad could be seen.
What is the difference between CPM and CPC?
With CPM you pay per thousand displays of the ad, with or without clicks. With CPC you pay only when someone clicks.
What is a good CPM?
There is no universal value. CPM varies widely by audience, channel and season. It is only good or bad compared with the results those impressions brought.
Related terms
Rodrigo Fávaro
Founder of ROO3, a marketing and technology agency in São José do Rio Preto, Brazil. Builds AI products running in production (Tobia, gerar.app, Pense Mercado) and maintains the AI Benchmark, a public ranking of AI models.
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