Cost Per Mille (CPM)
Cost to reach 1 000 viewers with an ad.
Formula
Variables
Example
$150 for 50 000 impressions → CPM = $3.00
How it works
CPM measures how much you pay for every 1,000 ad impressions, so it is a standard way to compare the cost of advertising campaigns of different sizes. The formula works by scaling the total cost up to a per-1,000 basis: if an ad costs more for the same number of impressions, its CPM is higher; if it reaches more people for the same spend, its CPM is lower. This makes it easier to judge efficiency across platforms, ad placements, or campaigns.
When to use it
Use CPM when you want to evaluate the cost efficiency of brand awareness ads, display ads, or other campaigns where reaching people matters more than getting clicks or sales. It is especially useful for comparing advertising options that deliver different numbers of impressions.
Worked example, step by step
A company spends $240 on an ad campaign and gets 80,000 impressions. CPM = (Cost ÷ Impressions) × 1000 CPM = (240 ÷ 80,000) × 1000 CPM = 0.003 × 1000 CPM = 3 Final answer: CPM = $3.00
Common mistakes to avoid
- Dividing impressions by cost instead of cost by impressions
- Forgetting to multiply by 1000
- Using clicks, views, or conversions instead of total impressions
Did You Know?
CPM was borrowed from print advertising; 'mille' is Latin for thousand.
Share this formula
More in Digital Marketing & Analytics
View allClick-Through Rate
BasicPercentage of ad viewers who click on the ad.
Cost Per Click
BasicAverage price paid for each click on an ad.
Cost Per Acquisition
BasicAverage cost to acquire one paying customer or conversion.
Return on Ad Spend
IntermediateRevenue generated for every currency unit spent on advertising.
Conversion Rate
BasicPercentage of visitors who complete a desired action.
Bounce Rate
BasicPercentage of visits where the user left after viewing only one page.