FormulaCPM = ad spend / impressions x 1,000

CPM stands for cost per mille, mille being Latin for thousand. It is what you pay for 1,000 impressions of an ad, the basic price of attention on platforms such as Meta, TikTok and YouTube.

CPM sits at the start of the cost chain. A high CPM is not a problem on its own if the ad gets clicks and sales, but it raises the cost of every result further down the funnel.

  • Competition: more advertisers bidding for the same people pushes it up, which is why it tends to climb in busy shopping periods such as the weeks before Christmas.
  • Audience: small or tightly targeted audiences usually cost more to reach than broad ones.
  • Ad quality: platforms favor ads people engage with, so a weak creative can cost more per impression.
  • Placement and country: prices differ from one placement and market to another.

Common mistakes: chasing the lowest CPM with audiences that never buy, and blaming CPM for results a poor creative causes. Judge it together with CTR and CPA, which show whether the impressions you paid for turned into sales.