CPM Formula: The Complete
Cost Per Mille Guide
Master the CPM formula with step-by-step examples, variations, and how it connects to CPC and CTR.
The CPM Formula
Cost per 1,000 ad impressions. Mille = thousand.
Total amount spent on the campaign (same period as impressions).
Number of times the ad was shown (views).
Cost per 1,000 impressions. Use to compare reach efficiency across campaigns.
Quick Example
You spend $400 and get 80,000 impressions.
CPM = ($400 ÷ 80,000) × 1,000 = $5
You pay $5 for every 1,000 impressions.
See Full-Funnel Performance
StoreRadar tracks revenue and conversions so you can measure ROAS and CPA. Use CPM for reach; use StoreRadar for outcomes.
CPM Formula Variations
The standard formula. Use same currency and time period for spend and impressions.
CTR as decimal (e.g. 0.02 for 2%).
Used by publishers; for advertisers it shows revenue efficiency of inventory.
Useful for planning reach.
Worked Examples
Basic CPM Calculation
You spent $800 on a campaign that delivered 160,000 impressions.
- 1 Ad Spend: $800
- 2 Impressions: 160,000
- 3 CPM = ($800 ÷ 160,000) × 1,000
- 4 CPM = $5
Your CPM is $5 per 1,000 impressions.
You pay $5 for every 1,000 times your ad is shown. Use this to compare cost efficiency across campaigns or platforms.
CPM and CPC Together
Same campaign: $800 spend, 160,000 impressions, 3,200 clicks.
- 1 CPM: ($800 ÷ 160,000) × 1,000 = $5
- 2 CTR: (3,200 ÷ 160,000) × 100 = 2%
- 3 CPC: $800 ÷ 3,200 = $0.25
- 4 Check: CPM ÷ (1,000 × 0.02) = $5 ÷ 20 = $0.25 ✓
CPM $5, CTR 2%, CPC $0.25.
Connecting CPM to CPC via CTR helps you understand how impression cost translates to click cost.
Comparing Two Campaigns
Campaign A: $600, 50,000 impressions. Campaign B: $400, 30,000 impressions.
- 1 Campaign A CPM: ($600 ÷ 50,000) × 1,000 = $12
- 2 Campaign B CPM: ($400 ÷ 30,000) × 1,000 ≈ $13.33
- 3 Campaign A has lower CPM (cheaper reach).
Campaign A CPM $12, Campaign B CPM $13.33.
Campaign A delivers cheaper impressions. If conversion rate and AOV are similar, A is more efficient unless B reaches a more valuable audience.
Common CPM Formula Mistakes
Mixing Time Periods or Currencies
Using weekly spend with monthly impressions, or different currencies, distorts CPM.
Use the same date range and currency for both ad spend and impressions.
Optimizing Only for CPM
Low CPM can mean cheap but low-quality impressions. You might get worse CPA or ROAS.
Use CPM for reach planning and comparison, but optimize campaigns for CPA or ROAS when conversions matter.
Comparing CPM Across Different Channels
Facebook CPM and Google Display CPM aren't directly comparable—different audiences and intent.
Compare CPM within the same platform and objective. Use CPA and ROAS for cross-channel decisions.
Ignoring Viewability
Some platforms count an 'impression' at 50% in view for 1 second. Not all impressions are equal.
Check viewability definitions. When comparing, use the same standard (e.g. viewable CPM) where available.
Related Advertising Formulas
| Formula | Calculation | Relationship |
|---|---|---|
| CPC | Ad Spend ÷ Clicks | Cost per click; connect to CPM via CTR: CPC = CPM ÷ (1,000 × CTR). |
| CTR | (Clicks ÷ Impressions) × 100 | Click-through rate; links CPM to CPC. |
| CPA | Ad Spend ÷ Conversions | Cost per acquisition; outcome metric to compare against CPM/CPC. |
| ROAS | Revenue ÷ Ad Spend | Revenue per ad dollar; use with CPM/CPC to assess full-funnel efficiency. |
Need to calculate CPM?
Use CPM CalculatorFrequently Asked Questions
Common questions about the CPM formula
The CPM formula is: CPM = (Ad Spend ÷ Impressions) × 1,000. CPM stands for Cost Per Mille (mille = thousand). It gives you the cost to show your ad 1,000 times. Example: $600 spend and 75,000 impressions → CPM = ($600 ÷ 75,000) × 1,000 = $8.
CPM is defined as cost per 1,000 impressions. (Ad Spend ÷ Impressions) gives you cost per single impression (e.g. $0.008). Multiplying by 1,000 converts that to cost per 1,000 impressions ($8), which is easier to compare across campaigns and platforms.
CPM is what you pay: (Ad Spend ÷ Impressions) × 1,000. eCPM (effective CPM) is what you earn per 1,000 impressions: (Revenue ÷ Impressions) × 1,000. Publishers and ad networks use eCPM to compare revenue across formats; advertisers use CPM to compare cost.
You need click-through rate. CPC = CPM ÷ (1,000 × CTR). So if CPM is $10 and CTR is 2% (0.02), CPC = $10 ÷ (1,000 × 0.02) = $10 ÷ 20 = $0.50. Or directly: CPC = Ad Spend ÷ Clicks.
Use CPM when the goal is reach or brand awareness—you pay for impressions. Use CPC when you're paying for clicks (traffic). Use CPA when you're optimizing for conversions (sales, signups). Many platforms let you bid by CPM, CPC, or CPA depending on the campaign objective.
CPM varies by channel and audience. Display might be $1–$10; Facebook/Instagram $5–$15; video $10–$30+. A 'good' CPM is one that, combined with your CTR and conversion rate, delivers an acceptable CPA and ROAS. Compare within the same platform and audience type.
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