What is CPM?

What is CPM? CPM (cost per mille) is the price an advertiser pays for 1,000 impressions of an ad. You work it out by dividing ad spend by impressions and multiplying by 1,000. It measures what the auction charged to show the ad, not whether anyone watched or clicked.

Work it out: free CPM calculator.

How do you calculate CPM?

CPM is ad spend divided by impressions, multiplied by 1,000. Meta defines it as the average cost of 1,000 impressions and calculates it the same way.

CPM = spend ÷ impressions × 1,000

An impression is one time the ad was shown on a screen. It does not mean the person watched it, so CPM tells you the price of showing the ad and nothing about the ad's quality.

Worked example

These are the same example numbers the CPM calculator uses, in any currency.

Input Value
Spend 2,500
Impressions 200,000

CPM = 2,500 ÷ 200,000 × 1,000 = 12.50. Each 1,000 impressions cost 12.50.

The same budget at a CPM of 25 would buy 100,000 impressions, half as many. Impressions = budget ÷ CPM × 1,000.

How is CPM different from CPC and CPA?

All three divide the same spend by a different count. The count you divide by decides what the number tells you.

Metric Formula Example result What it tells you
CPM spend ÷ impressions × 1,000 12.50 Price of reach
CPC spend ÷ clicks 0.83 (3,000 clicks) Price of a visit
CPA spend ÷ purchases 50 (50 purchases) Price of a sale

CPA follows Meta's cost per website purchase: spend divided by purchases.

How do you read CPM on AI and UGC video ads?

Read CPM next to the creative metrics, not on its own. Two ads with the same CPM can produce very different results if one stops the scroll and the other does not.

  • Hook rate shows whether people watched past the first 3 seconds. See hook rate.
  • CTR shows whether they clicked. See CTR.
  • CPA shows whether the clicks turned into orders.

When you test several AI versions of one script, the CPM often moves less between versions than hook rate and CTR do, so the creative differences show up in cost per click and cost per order. If CPM rises over time while results fall, check frequency and creative fatigue: the same people may be seeing the ad too often.

What is a break-even CPM?

Break-even CPM is the highest CPM you can pay before each order costs more in ads than it earns. It uses your margin per order and how often an impression turns into an order.

Break-even CPM = break-even CPA × (orders ÷ impressions) × 1,000

With a price of 150, variable costs of 90 per order and the 50 orders from 200,000 impressions above, break-even CPA is 60 and break-even CPM is 60 × (50 ÷ 200,000) × 1,000 = 15. The actual CPM of 12.50 is below 15, so at this conversion rate each order covers its ad cost. The CPM calculator and the break-even ROAS entry show the full working.

FAQ

What does CPM stand for?

CPM stands for cost per mille. Mille is Latin for thousand, so CPM is the cost of 1,000 impressions.

How do you calculate CPM?

Divide ad spend by impressions and multiply by 1,000. Spending 2,500 for 200,000 impressions gives a CPM of 12.50.

What is the difference between CPM and CPC?

CPM is the cost of 1,000 impressions whether or not anyone clicks. CPC is spend divided by clicks, so at the same CPM a higher CTR gives a lower CPC.

Is a lower CPM always better?

No. A cheap impression that nobody watches or clicks costs more per order than a dearer one that sells. Judge CPM together with hook rate, CTR and CPA.

Sources

Checked: 12 Oct 2026