What Is Cost Per Mille (CPM)?
In short: The CPM value tells you how much you're paying for every 1,000 ad impressions. It is simply an indicator of how effectively you're buying attention!
Example:
If you spent $200 for 50,000 impressions, your CPM = 1000 × 200/50,000 = $4
It matters especially to awareness campaigns, where reach is the goal. Importantly, the CPM will also be able to tell you which platform most of your traffic is coming from, so you can hone in on your ideal buyer audience.
However, a CPM can't tell you how much of your audience will convert. To know exactly how much your audience is worth, try out our CPC calculator (cost per click) here!
How to Calculate CPM
Just divide your total ad spend by total number of impressions, and multiply that value by 1000. Since the formula relies only on views and not actions/engagement, it is straightforward.
CPM Formula:
CPM = (Total Spend ÷ Total Impressions) × 1,000
Important Use Cases:
Estimate Impressions:
Total Impressions = (Total Spend ÷ CPM) × 1,000
Use this to predict how many impressions you'll get for a certain budget.
Estimate Budget:
Total Spend = (CPM × Total Impressions) ÷ 1,000
Calculate the budget needed for target impressions.
You can also compare CPM across platforms and identify the best channels.
Benchmark & Optimize Your CPM
What's considered a good CPM?
A good CPM is not a one-size-fits-all value. It varies depending on your targeting, platform, placement, and ad format.
As a general rule of thumb: we recommend you find the industry average CPM of your niche, and aim to stay below it!
Bear in mind that a 'low' CPM is not always a good CPM. A good CPM balances cost with other results that matter like clicks, conversions and sales. You will find out your ideal CPM gradually, by an iterative trial and error process.
Other factors that affect CPM:
Audience demographics
CPMs fluctuate based on age, income, location, interests, and behavior.
Seasonality and competition
CPMs may rise during festive seasons, sales events, or end-of-quarter pushes when many advertisers flood the market.
Creative format and quality
High-quality creatives can reduce CPMs over time via better relevance scores.
Placement type
Premium placements (reels, stories, in-stream YouTube ads) often cost more, whereas standard placements (feed, banner, sidebar) tend to have lower CPMs, but offer less engagement.
CPM Calculator FAQs
How do I calculate CPM manually? ▶
Super simple - take your total ad spend, divide it by your total impressions, and multiply by 1,000.
How does CPM differ from CPC or CPA? ▶
CPM (Cost per Mille): You pay for visibility, every 1,000 impressions, no matter if people click or not.
CPC (Cost per Click): You only pay when someone clicks on your ad.
CPA (Cost per Action): You pay when someone takes a specific action (like buying, signing up, etc.) which you define beforehand.
When should I optimize for CPM instead of CPC? ▶
When you need awareness more than sales. If getting seen is more important than getting clicked, bid for CPM. But if you're focused on conversions, optimize for CPC or CPA instead.
What ad platforms use CPM bidding models? ▶
Most major platforms offer CPM bidding, including: Meta (Facebook + Instagram), YouTube, Google Display Network, TikTok Ads, LinkedIn Ads, Snapchat Ads.
Can I forecast CPM-based campaign costs with this tool? ▶
Yes! If you know your estimated CPM and impression goals, you can reverse-engineer your spend.
