How to Calculate CPM: Formula & Example

Calculate CPM from advertising cost and impressions, estimate campaign cost or impressions, and understand the difference between reach and delivery.

The core formula

A campaign that costs 450 for 150,000 served impressions has a CPM of 3.00. A single person can generate multiple impressions, so CPM is not cost per thousand distinct people.

CPM = Cost ÷ Impressions × 1000

Worked example

$500 ÷ 100,000 × 1000 = $5 CPM.

How to calculate CPM

Use media cost and impression count from the same campaign and reporting window.
Divide cost by total impressions.
Multiply by 1,000 to express the cost per thousand impressions.
For planning, rearrange the formula to estimate cost from CPM and impressions or impressions from budget and CPM.

How to interpret CPM

CPM measures the price of ad delivery, not the value of the people reached. It is useful for comparing impression costs when placements and objectives are reasonably similar.

Impressions can include repeated exposures to the same person, so CPM should not be confused with cost per thousand unique people. Read it with frequency, click-through rate, conversion rate or brand-lift evidence depending on the campaign goal.

Common mistakes

Using reach instead of impressions in the CPM formula.
Comparing CPM across very different placements or audiences without context.
Assuming a low CPM means the campaign is generating qualified traffic or sales.

Use the calculator

Calculate CPM, advertising cost or impressions for digital campaigns.

Open CPM Calculator

Use impressions rather than audience reach

A campaign that costs 450 for 150,000 served impressions has a CPM of 3.00. A single person can generate multiple impressions, so CPM is not cost per thousand distinct people.

CPM is not an outcome metric

Placement, viewability, geographic market and creative quality can change CPM. To judge effectiveness pair it with clicks, conversions or an appropriate brand-lift measurement.

Frequently asked questions

What does CPM stand for?

Cost per mille, meaning cost per one thousand impressions.

Is CPM based on impressions or reach?

Standard CPM uses impressions, including repeated impressions to the same person.

How do I estimate impressions from budget?

Impressions are approximately budget divided by CPM, multiplied by 1,000.

What should I verify about cPM is not an outcome metric?

Placement, viewability, geographic market and creative quality can change CPM. To judge effectiveness pair it with clicks, conversions or an appropriate brand-lift measurement.