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Calculate your Cost Per Mille (cost per 1,000 impressions). Essential for display advertising, programmatic, and brand awareness campaigns.
CPM stands for Cost Per Mille (mille meaning thousand in Latin). It represents the cost an advertiser pays for 1,000 impressions of their ad. CPM is the standard pricing model for display advertising, video ads, and brand awareness campaigns. Unlike CPC (Cost Per Click), CPM charges based on impressions rather than clicks, making it ideal for campaigns focused on reach and visibility rather than direct conversions.
Understanding CPM is essential for marketers running display, video, or programmatic advertising campaigns. It helps you compare costs across different platforms, evaluate campaign efficiency, and make informed decisions about budget allocation. Lower CPMs mean you're reaching more people for the same budget, while higher CPMs may indicate premium placements or highly targeted audiences.
Calculating CPM is straightforward. The formula is:
CPM = (Total Ad Spend / Total Impressions) × 1,000For example, if you spent $500 on a campaign and received 250,000 impressions, your CPM would be calculated as: ($500 / 250,000) × 1,000 = $2.00. This means you're paying $2.00 for every 1,000 impressions.
To get accurate CPM calculations, make sure you're tracking all impressions from your campaign, including both served and viewable impressions. Some platforms may charge based on viewable impressions only, which can affect your actual CPM.
CPM varies significantly by platform, audience targeting, ad format, and industry. Here are average CPM ranges:
Facebook/Meta Ads
$5 - $15 average CPM. Higher for lookalike audiences, lower for broad targeting.
Google Display Network
$2 - $5 average CPM. Lower costs but typically lower engagement rates.
LinkedIn Ads
$30 - $50 average CPM. Premium B2B audience commands higher prices.
TikTok Ads
$6 - $10 average CPM. Growing platform with younger demographics.
Instagram Ads
$5 - $12 average CPM. Similar to Facebook but can vary by ad format.
Twitter/X Ads
$4 - $8 average CPM. Good for real-time engagement and trending topics.
Scenario: A brand runs a display campaign on Google Display Network.
CPM Calculation: ($2,000 / 500,000) × 1,000 = $4.00
This means the brand is paying $4.00 for every 1,000 impressions, which is within the typical range for Google Display Network. If the campaign generates a 0.5% click-through rate, the effective CPC would be $0.80 ($4.00 / 5 clicks per 1,000 impressions).
CPM bidding is ideal for specific campaign types and objectives:
However, if your primary goal is conversions or leads, CPC (Cost Per Click) or CPA (Cost Per Acquisition) bidding might be more appropriate, as you'll only pay when users take action rather than just viewing your ad.