What is CPM?
CPM (Cost per Mille) is the price you pay for 1,000 ad impressions. It’s the go-to pricing model for display, video, and programmatic inventory when your goal is reach rather than clicks or conversions. In analytics reports, CPM helps you benchmark media efficiency across networks and formats, and it pairs well with CTR, CPC, and downstream metrics like Conversion Rate and ROI.
Formula — How is CPM calculated?
CPM = (Total Ad Spend ÷ Impressions) × 1,000Example: €2,500 spend / 500,000 impressions × 1,000 = €5.00 CPM.
How CPM is used
- Planning reach: Estimate how many users you can touch for a fixed budget. Combine CPM with UTM tagging to attribute traffic by Campaign and Source.
- Buying strategy: In programmatic, you bid a max CPM. Many platforms also offer vCPM (pay per 1,000 viewable impressions) and eCPM (an effective CPM normalized across formats or revenue).
- Analytics tooling:
- GA4 and tag managers won’t compute CPM unless you import costs/impressions from ad platforms or set up server-side feeds.
- Plausible, Matomo, Simple Analytics can report CPM if you pass ad spend and impression counts via their APIs or custom events.
- Optimization loop: Use CPM alongside CPL, CPA, and lifetime value (LTV). Low CPM with poor CTR or weak Conversion Rate often signals mis-targeting or creative fatigue.
CPM vs. action-based pricing
| Pricing model | You pay for… | Primary use | Risk profile |
|---|---|---|---|
| CPM | 1,000 impressions | Reach/awareness | Advertiser bears performance risk |
| CPC | Clicks | Traffic acquisition | Shared risk |
| CPL/CPA | Leads/Actions | Performance | Publisher bears more risk |
Practical tips
- Normalize CPMs by placement (display vs. video), geography, and audience.
- Track frequency and unique reach (via Session & Pageview context) to avoid overserving.
- For experiments, couple CPM buys with A/B Testing and an agreed primary KPI (e.g., CTR, qualified visits, or post-view conversions).
- In reports, roll up to eCPM to compare apples-to-apples across mixed buys, then connect to Attribution Model analysis for business impact.