What is cost per 1000 impressions (CPM)?

Cost per 1000 impressions (CPM) is a pricing model that shows how much you pay for one thousand views of your ad. It is one of the core metrics used to plan, compare and optimise awareness campaigns across channels.

In digital marketing, cost per 1000 impressions (CPM) is calculated with a simple formula: CPM = (Total cost ÷ Total impressions) × 1000. If you spend €500 and receive 100,000 impressions, your CPM is €5. This tells you the cost to reach 1000 people with your ad, no matter how many click or convert.

How cost per 1000 impressions (CPM) is used

Advertisers use cost per 1000 impressions (CPM) to compare the efficiency of top-of-funnel campaigns. It is common in display, video, programmatic and social ads where reach and frequency matter more than direct clicks. For B2B and e-commerce brands, a stable CPM helps you forecast budget and expected reach across markets.

In platforms like Meta Ads and programmatic display, CPM often changes based on competition, audience quality and seasonality. Understanding this dynamic makes it easier to judge whether rising CPM is a problem or simply a sign of stronger competition for a valuable audience.

CPM versus CPC and CPA

Cost per 1000 impressions (CPM) focuses on visibility, while cost per click (CPC) and cost per acquisition (CPA) focus on actions. A campaign with a higher CPM but much better click-through rate (CTR) or conversion rate can still outperform a cheaper one. Growth-minded teams look at CPM together with CTR, CPC and ROAS, not in isolation.

For performance-driven brands, CPM is often used to diagnose issues. A sudden jump in CPM might signal targeting problems, lower ad relevance or algorithm changes. Analysing these patterns is a core part of how an embedded team like 6th Man Digital keeps paid media efficient.

Practical ways to optimise your CPM

  • Refine your audience targeting so you pay CPM for users who match your ideal buyer profile.
  • Improve ad relevance and creative quality to win auctions at lower cost per 1000 impressions.
  • Test placements and formats, for example in-feed versus stories or video versus image.
  • Align bidding strategies with your real goal, such as reach, impressions or conversions.
  • Monitor CPM trends by market, device and campaign objective to catch issues early.

These steps help you keep cost per 1000 impressions (CPM) under control while still reaching high-value audiences at scale, which is crucial for both B2B lead generation and e-commerce growth.

CPM in programmatic and Meta-style auctions

In programmatic advertising, cost per 1000 impressions (CPM) is often the core bidding unit. You compete in real-time auctions where algorithms decide which ad to show and at what price. A deeper dive into what CPM means in programmatic campaigns shows how floor prices, whitelists and frequency caps influence your effective CPM.

On social platforms, CPM is shaped by auction systems and machine learning. Meta's Andromeda update, for example, changes how targeting and performance signals impact delivery and costs, which indirectly affects CPM. You can read more about these changes and their impact on ad efficiency in our article on Meta Andromeda and ad performance.

When CPM is the right metric to optimise

Cost per 1000 impressions (CPM) is most useful when your main objective is reach, video views or brand lift. For mid and lower funnel campaigns, you still monitor CPM, but you optimise on revenue metrics first. High-performing teams treat CPM as one lever in a bigger system. They combine media buying expertise, smart testing and clear objectives, as described in our on-demand marketing team model.

Used correctly, cost per 1000 impressions (CPM) helps you buy attention efficiently, compare channels and keep your awareness engine running profitably as you scale.