What is CPM?
Cost Per Mille (Thousand Impressions)
CPM is the cost to show your ad to 1,000 people. It measures how expensive the auction is for your audience.
CPM = (Ad spend ÷ Impressions) × 1,000Meta: $8-$25 · Google Display: $2-$6 · LinkedIn: $30-$90 · TikTok: $6-$14
- CPM
- CPM is the cost to show your ad to 1,000 people. It measures how expensive the auction is for your audience.
Why CPM matters
CPM rises with audience narrowness, category competition, and seasonality. Q4 CPMs spike 40-80% across platforms. Low CPM is not always good — cheap impressions often mean low-intent audiences.
Worked example
Plug a real number into the formula to see CPM in action:
Numbers are illustrative. Try our Customer LTV Calculator for your real numbers.
Common mistakes with CPM
- 1
Looking at single-channel ROAS in isolation instead of blended MER. Last-click attribution overweights bottom-funnel channels and starves top-of-funnel.
- 2
Setting a uniform target across products with different margins. A 2× ROAS is profitable on 80% margin and unprofitable on 20%.
- 3
Optimizing CAC without measuring LTV. Cheap customers with bad retention destroy unit economics.
How to improve CPM
Run incrementality tests every quarter to validate which channels actually drive new revenue vs steal credit.
Build a unit economics dashboard separating CAC, LTV, contribution margin, and payback by channel and cohort.
Establish a contribution margin floor for each channel — pause spend when margin drops below threshold for 14 days.
Common questions about CPM
What is CPM?▾
How is CPM calculated?▾
What is a good CPM benchmark?▾
Why does CPM matter for marketing teams?▾
Related terms
Need help applying CPM to your business?
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