Cost per mille (CPM)

CPM tells you what attention costs before anyone clicks. It prices the inventory itself: how much a platform charges to put your ad in front of a thousand screens. That is the difference from cost per click, which prices the reaction to the ad. Two campaigns can have the same CPM and a fivefold gap in CPC, because one creative gets clicked and the other gets scrolled past.

Example

A fintech app runs a LinkedIn awareness campaign aimed at CFOs. Spend: $9,000. Impressions: 600,000. A parallel display campaign on a programmatic network costs $3,000; impressions: 1,500,000.

LinkedIn CPM: $9,000 / 600,000 × 1,000 = $15. Display CPM: $3,000 / 1,500,000 × 1,000 = $2.

Display looks 7.5 times cheaper. If the LinkedIn ads reach the right job titles and the display ads land on mobile game banners, the $2 impression buys almost nothing. The figures are illustrative and only show the arithmetic.

How to use it

Use CPM to plan reach budgets and to compare placements that target the same audience. When the audience differs, compare cost per qualified visit or cost per lead instead. Track CPM weekly per channel: a sudden rise often means auction pressure from a competitor or a narrowing audience, and it explains a jump in CPC before the creative is blamed.

Pair it with click-through rate. CPC equals CPM divided by (1,000 × CTR), so any change in cost per click comes from one of those two levers.

Common mistakes

• Comparing CPM across platforms with different audiences and calling the cheaper one more efficient.
• Ignoring viewability. An impression that loads below the fold counts in the denominator but no one sees it.
• Reading a falling CPM as success when the platform simply moved delivery to lower-quality placements.
• Mixing gross and net spend: agency fees in one report and not in another change CPM by the fee percentage.

Related terms