CPM (Cost Per Mille, where mille is Latin for a thousand) is an online advertising pricing model in which the advertiser pays for every thousand ad impressions. Unlike CPC — it doesn’t matter whether anyone clicks the ad or not.
Definition and formula
CPM = (total campaign cost / number of impressions) × 1000
Example: a campaign cost PLN 300 and generated 150,000 impressions. The CPM is PLN 2.
Where is the CPM model used?
CPM dominates wherever the goal is to reach as many people as possible — not direct sales:
- Meta Ads (Facebook/Instagram) — the default optimization model for reach and branding campaigns
- Display & Video 360 / programmatic — buying ad space on a CPM basis is the standard in display advertising
- YouTube — video campaigns are often billed on CPM or its variant CPV (cost per view)
- TikTok Ads — like Meta, CPM is the basic model for awareness campaigns
CPM vs. CPC — which model when?
This isn’t a matter of choosing one better model — they serve different goals:
| CPM | CPC | |
|---|---|---|
| Goal | Reach, building brand awareness | Traffic to the site, conversions |
| You pay for | Impressions | Clicks |
| When to use | Branding, video, display campaigns | Search, performance campaigns |
It’s worth knowing that even when a campaign is billed on a CPC basis, the platform still converts it internally to CPM — which is exactly why ads with a low CTR are more expensive or stop being shown (more on this in the article on CPC).
What determines the CPM?
- Target audience — the more precise and sought-after, the higher the CPM. Reaching CFOs costs more than reaching a broad audience
- Platform and format — video usually has a higher CPM than a static banner
- Seasonality — in periods of heavy advertising activity (e.g. Q4, Black Friday) CPM rises, because more advertisers compete for the same attention
- Ad quality and relevance — platforms reward engaging ads with a lower CPM
Summary
CPM is the cost of reaching a thousand people. It is the basic model for campaigns aimed at building reach and brand awareness. The higher the CPM, the more expensive it is to reach a recipient — which is why targeting quality and engaging creatives directly affect a campaign’s cost efficiency.
