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What Is CPM? Formula, Example, and How to Use It
Learn what CPM means, how to calculate cost per thousand impressions, and when to use it alongside CPC, CPA, and ROAS.
CPM is the average cost of 1,000 ad impressions. Calculate it by dividing campaign cost by impressions and multiplying by 1,000.
CPM means cost per thousand impressions. It tells you how much an advertiser pays, on average, for 1,000 ad impressions.
CPM formula
CPM = total campaign cost ÷ total impressions × 1,000.
If a campaign costs $500 and delivers 200,000 impressions, its CPM is $2.50.
What CPM tells you
CPM makes the cost of reach comparable across campaigns, placements, markets, and publishers. A lower CPM means impressions cost less, but it does not prove that the traffic is relevant or that the campaign produced business results.
CPM compared with CPC, CPA, and ROAS
- CPM measures the cost of exposure.
- CPC measures the cost of a click.
- CPA measures the cost of a conversion or action.
- ROAS compares conversion value or revenue with advertising spend.
Use CPM for reach and delivery analysis, then use downstream metrics to evaluate response and business value.
How to use CPM responsibly
Compare campaigns using the same currency, date range, impression definition, and reporting source. Investigate discrepancies between ad-server, publisher, and analytics data before making optimization decisions.
Calculate CPM with the free CPM Calculator, or compare outcomes with the CPC Calculator and ROAS Calculator.