Hi all!
I’m just dipping my toes into digital advertising for my small online store, and I keep seeing “CPM” pop up everywhere on Google Ads, Amazon, YouTube, you name it.
Can someone break it down for me?
What is CMP, how does it work, and is it something I should use?
Hey @nightingaLea-01, CPM stands for Cost Per Mille, which is fancy Latin for “cost per thousand.” In advertising, it’s the cost per thousand impressions, basically, how much you pay for your ad to be shown 1,000 times.
An impression is just a single view of your ad, whether someone clicks it or not. It’s super common in digital marketing, especially for things like display ads, social media campaigns, and programmatic advertising.
I’ve used CPM a bunch for brand awareness campaigns. For example, when I launched a new product line last year, I ran banner ads on a niche blog.
It was a cheap way to get my brand out there, but I’ll admit I didn’t see a ton of direct sales from it.
To piggyback on @michelle-brnt, CPM is huge in programmatic advertising, where ad buying and selling are automated.
Think of platforms like Amazon DSP or Google’s ad network, they often use CPM to price display or video ads.
It’s been around forever because it’s simple: You’re charged based on how many times your ad appears, not what people do with it.
I thought CPM was the holy grail when I started out, but I learned the hard way it’s not perfect.
Once, I ran a campaign with a $2 CPM, thinking I’d scored a deal.
Turns out, half the impressions were on a site with terrible engagement, people weren’t even scrolling down to see my ad! 
So, yeah, low CPM doesn’t always mean success.
Okay, that’s starting to make sense. So it’s about getting my ad seen a lot, not necessarily clicked or bought from.
Why would I pick CPM over something else, though? How’s CPM different from CPC or CPA?
CPM is all about exposure, which is why it’s perfect for brand awareness or delivering a message to a big audience.
Say you’re launching a new store, CPM gets your name out there fast.
Compare that to:
Here’s my story:
I ran a CPM campaign on YouTube last summer for a video ad.
My CPM was $12, and I got 100,000 impressions for $1,200. I didn’t care about clicks, I just wanted people to see my brand.
Later, I switched to CPC for a retargeting campaign ($0.50 per click) to bring those viewers back to my site. Totally different goals, totally different models.
CPM’s strength is reach, but it’s not great at measuring engagement or sales on its own. That’s why I pair it with other metrics like CTR (Click-Through Rate) or conversion rate.
I tried CPM for my e-commerce shop thinking it’d boost sales.
I spent $500 on Amazon’s Sponsored Display ads (they use a CPM model, sometimes called vCPM for viewable impressions). My CPM was $5, so I got 100,000 impressions.
I was thrilled until I realized almost no one clicked through!
I thought impressions would magically turn into customers, but nope. Turns out, I should’ve used CPC or CPA if sales were my goal.
Lesson learned: CPM is for awareness, not instant results.
Got it - CPM is for getting eyes on my ad, not necessarily wallets. How do I figure out what my CPM is? Is there a formula or something?
Yep, it’s super easy to calculate! The CPM formula is:
Let’s break it down with an example. 
Lets say you ran a campaign where you spent $750 and got 150,000 impressions.
So, your CPM will be $5.
You just need your total ad spend and the number of impressions. Some platforms (like Google Ads or Amazon DSP) will calculate it for you.
Quick tip: The “total cost” can include more than just what you pay the platform.
I once forgot to factor in creative production costs, like designing the ad itself. My real CPM ended up higher than I thought because I only looked at the media buying fee.
Rookie mistake!
That’s helpful! So, what makes CPM high or low? Why does it change so much?
Oh, tons of stuff affects CPM rates! Here’s what I’ve seen from my campaigns:
1. Targeting: Niche audiences (like “luxury watch buyers”) have higher CPMs because they’re smaller and more valuable. Broad audiences (like “all adults”) are cheaper.
2. Ad Quality: Engaging, relevant ads can sometimes lower CPM because they perform better, but platforms might charge more for premium creative formats like video.
3. Placement: Ads at the top of a page or on high-traffic sites cost more. I once paid a $20 CPM for a prime spot on a news site—worth it for the visibility.
4. Timing: CPMs spike during busy seasons like Black Friday. Last November, my usual $3 CPM jumped to $10!
5. Platform: Social media CPMs are often $2–$10, while YouTube video ads can hit $10–$20. Google Ads varies wildly depending on competition.
6. Ad Format: Video ads have higher CPMs than static banners because they’re more engaging (and costlier to make).
7. Competition: More advertisers bidding in an ad auction drives up the price.
CPM is just one piece of the puzzle. Here’s how it connects to other key metrics:
CPC (Cost Per Click): Measures cost per click. You can calculate it from CPM if you know your CTR:
CPC = CPM / (CTR × 10)
Example: CPM of $10, CTR of 2% (0.02) →
CPC = 10 / (0.02 × 10) = 10 / 0.2 = 0.50
CTR (Click-Through Rate): Clicks divided by impressions. It shows how engaging your ad is. A high CTR with a low CPM is a win!
Conversion Rate: Percentage of clicks that turn into actions (sales, sign-ups). Ties CPM to actual outcomes.
ROI (Return on Investment): Compares total campaign cost (including CPM) to revenue generated. CPM alone won’t tell you this—you need the full picture.
CPM got you the reach; the other metrics showed you the payoff.
And don’t sleep on eCPM (effective CPM)!
It’s a way to measure revenue per 1,000 impressions, even if you’re not using a CPM model.
I used it to compare my CPM campaign to a CPC one—it helped me see which was more cost-effective overall. 
Wait, I’ve heard “impressions” and “page views” used interchangeably. Are they the similiar?
Nope, common mix-up!
Impressions are about ads, how many times your ad is displayed. Page views are about the webpage, how many times someone loads the page. A single page view could have multiple ad impressions if there are several ads on it.