CPM (cost per thousand impressions)
CPM is the price of attention: what you pay for your ad to be shown 1,000 times. It sits at the very top of the funnel, before anyone clicks, and it sets the cost of everything that follows.
What CPM means
CPM stands for cost per mille, mille being Latin for thousand. It is the amount you spend for every 1,000 impressions, that is, every 1,000 times your ad appears on someone's screen. On Meta, TikTok and display networks you usually pay for impressions, so CPM is the closest thing to the price tag of the auction. On Google search you pay per click, but you can still work out CPM and use it to compare.
An impression is not a person who read your ad. The same person can see the same ad several times, which is why platforms report reach (how many different people) and frequency (how many times each of them, on average) next to impressions.
The formula
CPM = ad spend ÷ impressions × 1,000
Impressions = ad spend ÷ CPM × 1,000
Impressions = reach × frequency
A worked example
A small bakery spends $300 on a week of Instagram ads, and the ads are shown 60,000 times. CPM is 300 ÷ 60,000 × 1,000 = $5. The bakery and its numbers are made up for this example; the CTR and CPA pages in this glossary follow the same campaign.
The next week the bakery narrows its audience to people who live within 3 km of the shop. Spend stays at $300, but impressions drop to 40,000, so CPM rises to $7.50. That looks worse, yet if those nearby people click and visit more often, the cost of each visit can fall. CPM alone cannot tell you whether the change was a good one.
What pushes CPM up or down
CPM is set by the auction: how many advertisers want the same people at the same moment, and how the platform rates your ad. Narrow or valuable audiences, busy seasons such as the weeks before big shopping days, and ads that people hide or scroll past quickly all push it up. Broad audiences, quiet periods and ads that hold attention bring it down.
Because it depends on country, platform, placement and season, there is no single good CPM. Compare your CPM with your own earlier campaigns for the same audience and time of year, not with a number from someone else's account.
Three mistakes to watch for
Chasing the lowest CPM. The cheapest impressions are often the least relevant ones, and an audience that never buys is expensive at any price.
Comparing CPM across platforms as if it measured the same thing. A search result, a story ad and a banner at the bottom of a page do not get the same attention.
Reading CPM without the next step. CPM only means something together with click-through rate and conversion rate. Cost per click is CPM ÷ (1,000 × CTR), so a higher CPM with a much better CTR can still give you cheaper clicks.