KPIMarketing

Cost per Impression (CPM)

Cost per 1,000 ad impressions, measuring paid media efficiency

What is Cost per Impression (CPM)?

Cost per impression, usually quoted per thousand impressions and abbreviated CPM, is the price paid for every thousand times an ad is shown. It is the standard way of pricing and comparing reach-based advertising.

It is most relevant when the goal is awareness rather than direct response. It tells you how cheaply you are buying attention, though not how good that attention is.

How this KPI is measured

Function: Marketing
Sub-function: Paid Media
Industry: All Industries
Type: Lagging
Impact: Financial control
Unit: $
Measurement frequency: Weekly / Monthly
Formula: (Total ad spend / Total impressions) × 1,000

How to calculate it

Divide total ad spend by total impressions, and multiply by 1,000.

For example, if a campaign spent 2,500 and was shown 500,000 times, the cost per thousand impressions is (2,500 / 500,000) x 1,000 = 5.

Compare it across platforms, formats and audiences, remembering that narrow, high-value audiences cost more per thousand than broad ones.

Where it is used

Planning awareness campaigns
Estimate the budget needed to reach a target number of impressions.
Comparing platforms
See where a given budget buys the most reach.
Negotiating media
Use it as a benchmark when buying direct from publishers.

How to improve it

Match the audience to the goalDecide whether you need broad reach or a precise audience, since the price differs.
Compare formats and placementsTest where impressions are cheapest for your audience.
Control frequencyLimit how often one person sees the ad so impressions are not wasted on repeat views.
Improve creative qualityBetter creative can lower cost on platforms that reward engagement.
Tie impressions to outcomesCheck that cheaper reach is leading to more awareness, visits or enquiries.

Tips and common mistakes

Impressions are not attention. A very cheap thousand can include ads that were never really seen.
Compare CPM only between similar audiences and formats.
For direct-response goals, cost per result is a better guide than cost per thousand.

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