How to calculate CPM
CPM = (total cost ÷ impressions) × 1,000
When CPM is used
- Brand awareness campaigns on display networks, YouTube and social media, where the goal is to be seen by many people.
- Comparing channels: CPM shows the cost of reach, whatever the pricing model.
- Publishers: websites and apps that sell ad space measure revenue as eCPM or page RPM, their earnings per thousand impressions or page views.
CPM vs CPC
With CPM you pay for visibility, whether or not anyone clicks. With cost per click (CPC) you pay only for clicks. CPM suits awareness goals; CPC suits campaigns that should bring visitors and leads. You can compare the two: effective CPC = CPM ÷ (CTR × 1,000), with CTR written as a fraction.
CPM example
A brand runs a video campaign for two weeks. It spends 10,000 kr and gets 800,000 impressions, so CPM is 12.5 kr. The same budget on another platform gives 500,000 impressions, a CPM of 20 kr. The brand checks whether the cheaper reach also gives view time and search for the brand name, not only a low price.
CPM, CPC and CPA compared
| Model | You pay for | Suits |
|---|---|---|
| CPM | 1,000 impressions | Awareness and reach |
| CPC | A click | Traffic |
| CPA | A conversion | Leads and sales |
CPM mistakes
- Choosing the lowest CPM without checking where the ads appear.
- Counting impressions that were never visible on screen.
- Ignoring frequency, so the same people see an ad too many times.
- Judging an awareness campaign by direct sales alone.
CPM FAQs
Why is it called “mille”?
“Mille” is Latin for a thousand. CPM means cost per thousand. See impressions.
What does eCPM mean?
Effective CPM: the revenue a publisher or campaign earns per 1,000 impressions, whatever the pricing model. See display ads and cost per click.