Definition
CPM is the cost per 1,000 impressions. It varies by audience, placement, seasonality, and competition.
Formula
CPM = (ad spend / impressions) * 1000
Example
If you spent $1,200 for 100,000 impressions, CPM = ($1,200 / 100,000) * 1000 = $12.
How to use it
- Use CPM with CTR to estimate CPC, then with CVR to estimate CPA.
- Judge CPM against your economics, not as a standalone KPI.
Why this matters
This term matters because it affects how you interpret performance and make budget decisions. If you use inconsistent definitions or windows, ROAS/CPA can look "better" while profit gets worse.
Practical checklist
- Write a 1-line definition for "CPM (Cost Per Mille)" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Use a calculator that references this term (e.g., Break-even CPM Calculator) to sanity-check assumptions.
- Read the related guide (e.g., CPM (Cost Per 1,000 Impressions): definition, formula, and how to calculate) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- Break-even CPM Calculator: Compute break-even and target CPM from CTR, CVR, AOV, and contribution margin assumptions.
- Paid Ads Funnel Calculator: Model CPM -> CTR -> CVR to estimate CPC, CPA, ROAS, and profit per 1,000 impressions (with margin and variable costs).
- Break-even CTR Calculator: Compute the CTR required to break even (and hit a target) given CPM, CVR, AOV, and contribution margin.
- Break-even CVR Calculator: Compute the CVR required to break even (and hit a target) given CPM, CTR, AOV, and contribution margin.
Guides
- CPM (Cost Per 1,000 Impressions): definition, formula, and how to calculate: CPM explained: what cost per mille means, how to calculate it, and how CPM affects CPC and CPA.
- Break-even CPM: how to price impressions from CTR, CVR, and margin: A practical guide to break-even CPM: translate CTR, CVR, AOV, and contribution margin into a max CPM and a target CPM with buffer.
- Paid ads funnel: CPM, CTR, CVR -> CPC, CPA, ROAS (with profit): A practical guide to the paid ads funnel: how CPM, CTR, and CVR drive CPC, CPA, ROAS, and profit - with formulas and common pitfalls.
- CTR (Click-Through Rate): definition, formula, and how to improve: CTR explained: what click-through rate is, how to calculate it, and how to improve CTR without sacrificing conversion quality.
- CPC (Cost Per Click): definition, formula, and how to calculate: CPC explained: what cost per click means, how to calculate it, and how CPC connects to CTR, CVR, and CPA.