What is CPM and how do you calculate it?
CPM (cost per mille, Latin for thousand) is what 1,000 ad impressions cost. Divide spend by impressions and multiply by 1,000: $1,500 for 250,000 impressions is a $6.00 CPM.
Rearranged: budget = CPM × impressions ÷ 1,000, and impressions = budget ÷ CPM × 1,000.
What moves CPM
- Competition for the audience. Ads are bought in auctions, so more advertisers chasing the same people pushes CPM up, as it typically does in peak retail periods.
- Audience size and targeting. Narrow, high-value audiences cost more per impression than broad ones.
- Placement and format. Video, premium sites and feeds price differently from display banners.
- Ad relevance. Platforms charge less for ads people respond to; on Meta, below-average relevance rankings raise costs.
CPM vs vCPM vs eCPM
vCPM counts only viewable impressions (on Google, at least half the ad on screen for one second, or two seconds of video). eCPM (effective CPM) is the same formula used by publishers on revenue instead of cost. All three are “per thousand”.
How CPM fits with the other ad metrics
| Metric | Formula | Tells you |
|---|---|---|
| CPM | spend ÷ impressions × 1,000 | what reach costs |
| CPC | spend ÷ clicks | what traffic costs |
| CTR | clicks ÷ impressions × 100 | how compelling the ad is |
| Conversion rate | conversions ÷ clicks × 100 | how well the landing page converts |
| CPA | spend ÷ conversions | what a result costs |
| ROAS | revenue ÷ spend | what each $1 of spend returns |
To plan reach for a whole campaign, set a budget per channel in the media plan builder or work backwards from a sales target with the marketing funnel calculator.
How to calculate CPM
- Choose what to calculate. Pick CPM, ad spend or impressions.
- Enter the other two values. Type the two you know, from your ad platform’s report for the same date range.
- Read the result. The answer updates as you type, using CPM = ad spend ÷ impressions × 1,000.
Frequently asked questions
What does CPM stand for?
Cost per mille: the cost of 1,000 impressions. Mille is Latin for thousand.
What is a good CPM?
It depends on the platform, placement, audience, country and time of year, so there is no single good number. Compare a campaign with its own history and with other campaigns on the same platform and placement, and judge it alongside CTR and CPA: a cheap CPM that never converts is not a good one.
How do I calculate the budget for a number of impressions?
Multiply the CPM by the impressions and divide by 1,000. 500,000 impressions at an $8 CPM costs 8 × 500,000 ÷ 1,000 = $4,000.
How can I lower my CPM?
Broaden the audience, test cheaper placements, improve creative so relevance rankings rise, and avoid the most competitive periods where you can.