Cost per mille (CPM), also called cost per thousand impressions, is the price an advertiser pays for 1,000 ad impressions. It is calculated by dividing media spend by the number of impressions and multiplying by 1,000. CPM measures the cost of exposure, which makes it the standard pricing and comparison unit for awareness, display, video and social campaigns.
Cost per mille (CPM) formula
Cost per mille (CPM) = (Media spend / Number of impressions) × 1,000
"Mille" is Latin for thousand. CPM counts impressions, not people: if one person sees an ad three times, that is three impressions. To relate cost to the number of unique people reached, divide spend by reach instead.
Example
If your media spend is $10,000 and you receive 2,000,000 impressions, your CPM is $5.00.
| Advertising spend | $10,000 |
| Number of Impressions | 2,000,000 |
| Cost Per Mille (CPM) | $5.00 |
CPM and what counts as an impression
A CPM is only as comparable as the impressions behind it. Industry guidelines from the IAB, developed with the Media Rating Council, define how ad impressions should be counted, filtered and reported (IAB, 2004). Platforms still differ in what they count. A served impression is counted when the ad is delivered, while a viewable impression requires that the ad could actually be seen on screen.
This is why some platforms sell viewable CPM (vCPM). In Google Ads, vCPM bidding means the advertiser pays only for impressions that can be seen, and Google suggests that a vCPM bid is typically set higher than a regular CPM bid because viewable impressions are potentially more valuable (Google Ads Help, n.d.-a; Google Ads Help, n.d.-b). When comparing CPMs across channels, check whether both figures use the same impression definition.
How CPM is used
- Buying media. CPM is the common pricing unit for campaigns aimed at reach and awareness, such as display, online video, connected TV and social media. Bidding strategies include maximum CPM and target CPM.
- Comparing exposure costs. Marketers compare CPM across channels and campaigns to see where impressions are cheapest. CPMs vary widely with audience, format, placement and season.
- Diagnosing performance changes. When the return of a channel changes, CPM is the first cost component to check. A rising CPM with stable conversion rates lowers return on spend.
CPM links to the other funnel metrics: CPC = CPM / (1,000 × CTR).
Why a low CPM is not the same as good value
A lower CPM buys more impressions, but not necessarily more sales. Impressions may be unviewable, shown repeatedly to the same people, or delivered to audiences that would buy anyway. The value of an impression depends on the sales it causes, and that effect is small and noisy compared with normal variation in sales. Lewis and Rao analyzed 25 large field experiments with U.S. retailers and brokerages, most of them reaching millions of customers, and showed that even at that scale the returns to advertising are hard to measure precisely (Lewis & Rao, 2015).
In marketing mix modeling, impressions or spend are the inputs, and the model estimates the incremental sales each channel generates, including delayed effects. CPM then helps explain why a channel's incremental return moved: was it the price of media, or the response to it?
How to track CPM
CPM is reported by the ad platform where the campaign runs. For example, in a Google Performance Max campaign, Google Ads records impressions, spend and CPM. To compare CPMs across platforms, channels and campaigns, the data needs to be consolidated and grouped consistently. Below are examples of tracking views from the Sellforte demo.
Ad platform-level CPM analysis:
Advertising channel-level CPM analysis:
CPM in the media metric funnel
CPM is one of the cost-efficiency metrics in the media metric funnel, which follows an ad from impressions to clicks, conversions and conversion value. Conversions in the funnel are counted by attribution rules after a click or, for some ad types, after a view without a click, so the funnel describes attributed results rather than incremental ones.
Key takeaways
- CPM = (media spend / impressions) × 1,000. It prices exposure.
- Compare CPMs only when the impression definitions match, for example served vs. viewable.
- A low CPM does not guarantee incremental sales; that has to be measured with MMM or experiments.
Related terms
Further reading on Sellforte
- Why should you combine media metrics with MMM insights?
- Can MMM and incrementality testing measure the full sales impact of mid- and top-of-funnel campaigns?
- What is marketing mix modeling?
References
- Google Ads Help. (n.d.-a). Cost-per-thousand impressions (CPM): Definition. Retrieved 2026-10-30, from https://support.google.com/google-ads/answer/6310
- Google Ads Help. (n.d.-b). Cost-per-thousand viewable impressions (viewable CPM). Retrieved 2026-10-30, from https://support.google.com/google-ads/answer/6026409
- Interactive Advertising Bureau. (2004). Interactive audience measurement and advertising campaign reporting and audit guidelines (U.S. version 6.0b). https://www.iab.com/wp-content/uploads/2015/06/Ad-Impression-Measurment-Guideline-US.pdf
- Lewis, R. A., & Rao, J. M. (2015). The unfavorable economics of measuring the returns to advertising. The Quarterly Journal of Economics, 130(4), 1941–1973. https://doi.org/10.1093/qje/qjv023
Authors
Lauri Potka is the Chief Operating Officer at Sellforte, with over 15 years of experience in Marketing Mix Modeling, marketing measurement, and media spend optimization. Before joining Sellforte, he worked as a management consultant at the Boston Consulting Group, advising some of the world’s largest advertisers on data-driven marketing optimization. Follow Lauri in LinkedIn, where he is one of the leading voices in MMM and marketing measurement.
