What is CPM and How Do You Calculate It?
CPM stands for Cost Per Mille ("mille" is Latin for thousand). In digital advertising and media buying, CPM represents the price an advertiser pays for every 1,000 advertisements displayed on a webpage, social media feed, or search engine placement.
The mathematical formula for calculating CPM is straightforward:
CPM = (Total Campaign Cost / Total Impressions) × 1,000
Conversely, if you want to determine how many impressions your budget will buy at a given CPM rate, use this variation:
Total Impressions = (Total Campaign Cost / CPM) × 1,000
Why CPM Matters for Small Business Advertising
Understanding CPM is essential when comparing advertising channels like Google Ads Management, Meta Ads, and programmatic display networks. While Cost Per Click (CPC) measures how many users click your ad, CPM measures pure brand visibility and reach.
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