Metric · 1 min read
Cost per thousand (CPM)
Cost Per Thousand (CPM) measures the cost of serving 1,000 ad impressions. Here’s everything you need to know: what it is, why it matters, how to calculate it, and how to optimize it!
Formula
CPM = (Total Cost ÷ Total Impressions) × 1,000
Example. If you spend $500 on a campaign that gets 100,000 impressions, your CPM is ($500 ÷ 100,000) × 1,000 = $5. This means you paid $5 per 1,000 views.
What it is
Cost Per Thousand (CPM) is an advertising metric that represents the cost of delivering 1,000 impressions of your ad. It’s widely used in display, video, and programmatic advertising to assess cost-efficiency for visibility-driven campaigns.
Why it matters
CPM helps advertisers understand how much they’re paying for brand exposure. It’s especially important for campaigns focused on reach, awareness, or viewability rather than direct response.
How it is calculated
Divide your total campaign cost by the number of impressions (in thousands) to get your Cost Per Thousand.
A good value
A good CPM depends on your industry and platform, but generally ranges between $2–$10. Lower CPMs paired with high visibility mean strong efficiency.
A bad value
A high CPM with low engagement may signal ineffective targeting or expensive placements that don’t deliver value.
Do
Use these strategies to keep CPM low while maintaining ad quality.
- 01
Target smartly
Avoid overly broad targeting—refined audience segments can lower CPM while increasing relevance.
- 02
Test creative formats
Compare static, carousel, and video formats to find which drives impressions at the best cost.
- 03
Monitor placement performance
Review platform and device-level CPM to remove underperforming placements.
Avoid
Don’t optimize for low CPM alone—focus on both visibility and post-impression performance like clicks or conversions.
Related metrics you might be interested in
Google Ads Impressions= Total Number of Times Your Ad Is DisplayedGoogle Advertising Costs= Total Spend on Search + Display + Video + Other Campaign Fees
Google Analytics Traffic= Total Number of User Sessions Across All Channels
Impression Share= Impressions Received ÷ Total Eligible Impressions × 100
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Calculate Cost per Thousand on your own data.
OWOX Data Marts connects cost and impression data across platforms, helping you track CPM by audience, format, and device. Use these insights to improve efficiency and maximize exposure.
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