CPM (Cost Per Mille)

CPM stands for Cost Per Mille — the price an advertiser pays for one thousand impressions of an ad (mille is Latin for thousand; you will also see it called cost per thousand or CPT). It is the oldest media pricing model, inherited from print and TV, and it remains the base currency of display advertising and programmatic trading.

How CPM works

The formula is:

CPM = (total spend / impressions served) × 1,000

A display campaign that costs $800 and delivers 400,000 impressions runs at a $2.00 CPM. In real-time bidding exchanges, buyers compete auction by auction on the price they are willing to pay per thousand impressions shown to a specific audience segment. Social platforms such as Meta, LinkedIn and TikTok also clear their internal auctions on an effective CPM basis, even when the advertiser has selected a clicks or conversions objective — the system simply converts expected engagement into an impression-level bid.

Because a served impression is not the same as a seen one, the industry increasingly trades on viewable impressions (vCPM), which only count ads meeting the MRC viewability threshold. This shields budgets from placements that render off-screen.

Practical applications

CPM is the natural model when the objective is reach and memorability rather than an immediate response: product launches, brand campaigns, sponsorships and frequency-driven remarketing sequences. Media planners compare effective CPMs across channels to find where a thousand contacts with the target group cost the least, while publishers use CPM as the yardstick of their inventory's value — premium audiences command premium rates.

CPM versus other pricing models

• CPC — you pay per click; better when traffic is the goal,
• CPA — you pay per completed action; lowest risk for the advertiser,
• CPV — you pay per video view; standard for YouTube-style inventory.

A balanced media plan usually mixes them: CPM builds awareness at the top of the funnel, CPC buys qualified visits in the middle, and CPA-optimized campaigns close the loop at the bottom. Judging a CPM buy purely by click-through rate misses its point — its job is reach, recall and the lift it creates for every other channel.