Formula
CPM = ad spend / impressions x 1,000.
Meta's help page defines it as "the amount spent on an ad campaign, divided by impressions, multiplied by 1,000", with the example "if you spent $50 and got 10,000 impressions, your CPM would be $5". On Google Ads, CPM is also a way to bid. Google defines it as "a way to bid where you pay per one thousand views (impressions) on the Google Display Network". Google's reports also show an average CPM for every campaign.
Worked example
You spend $200 and the ad set records 25,000 impressions. CPM = 200 / 25,000 x 1,000 = $8.
Turn it around to see what a change costs. At a $16 CPM the same $200 buys 12,500 impressions, half as many people seeing the ad for the same money. If the click-through rate stays at 1%, clicks fall from 250 to 125 and the cost per click doubles.
Why it matters to a media buyer
CPM is the price of attention. Every other cost metric sits on top of it. Cost per click is CPM divided by click-through rate. Cost per acquisition is cost per click divided by conversion rate. When results get more expensive, CPM tells you whether the auction got pricier or your creative stopped working.
CPM moves with competition in the auction, which is why it climbs every fourth quarter. It moves with audience size, since a narrow audience has fewer cheap impressions to sell. It moves with placement, since Stories and Reels price differently from Feed. And it moves with creative, because Meta's auction rewards ads people engage with. A CPM rise with a steady click-through rate points at the auction. A CPM rise right after you narrowed the audience points at the targeting.
In Adsap
The performance dashboard shows CPM per campaign, ad set and ad, from yesterday's numbers. Breakdowns by placement, country, age and gender show where the expensive impressions are. The free CPM, CPC and CTR calculator turns spend, impressions and clicks into all three, and estimates a cost per click from a CPM and a click-through rate.
Frequently asked questions
There is no single figure. CPM depends on the country, the placement, the audience size, the season and the objective. Compare your CPM with your own history for the same audience, and read it next to the click-through rate and the cost per acquisition.
More advertisers bid for the same impressions before the holidays, so the auction clears at a higher price. The impressions did not change; the competition for them did.
Both, depending on the platform. On Meta, CPM is a reporting metric: amount spent divided by impressions, times 1,000. On Google Ads it is also a bidding method on the Display Network, where you pay per 1,000 impressions.
Sources
- Meta Business Help Center, CPM (cost per 1,000 impressions): the definition and the $50 for 10,000 impressions example. https://www.facebook.com/business/help/753932008002620
- Google Ads Help, Cost-per-thousand impressions (CPM): definition. https://support.google.com/google-ads/answer/6310
- Adsap, CPM, CPC and CTR calculator.