Quick brief
What to know before you calculate
A short read on the assumptions, trade-offs and definitions that shape the answer.
- CPM equals campaign cost divided by impressions, multiplied by 1,000.
- CPM is a reach cost metric, not a sales result by itself.
- CTR, CPC and conversion rate explain what happens after the impression.
The CPM formula
CPM is calculated by dividing campaign cost by impressions and multiplying by 1,000. If a campaign costs GBP 500 and serves 100,000 impressions, the CPM is GBP 5. This puts campaigns with different reach volumes onto the same thousand-impression basis.
What counts as an impression
Use the impression count from the same campaign and period as the cost. Some reports show served impressions, viewable impressions or unique reach. Those are different measures, so do not mix them when comparing CPM across channels or placements.
Connect CPM to CPC
CPM can be connected to CPC when you also know clicks. A campaign with a higher CPM may still have a lower CPC if the audience clicks at a much higher rate. That is why CPM, click-through rate and CPC should usually be reviewed together.
Check downstream value
A low CPM can be useful for awareness, but it does not prove efficient acquisition. For response campaigns, review conversion rate, cost per conversion, revenue, margin and customer quality before deciding whether the media price is genuinely good.
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