What Is CPM? Cost Per 1,000 Impressions Explained (2026)
CPM (cost per mille) is the cost of 1,000 ad impressions: (spend ÷ impressions) × 1,000. Here's the formula, what drives CPM up or down, and how to read it without being misled.
CPM means cost per mille — the cost of 1,000 ad impressions. It's calculated as (spend ÷ impressions) × 1,000, and it's the base layer of media cost: when CPM rises, almost every downstream metric gets more expensive too.
The CPM formula
CPM = (Ad spend ÷ Impressions) × 1,000
Example: $500 spent for 250,000 impressions gives a CPM of (500 ÷ 250,000) × 1,000 = $2.00 per thousand impressions.
What drives CPM up or down
- Audience competition — popular audiences and seasons (holidays, sales events) cost more.
- Ad relevance — platforms reward engaging ads with cheaper delivery, so a tired creative quietly raises CPM.
- Placement and format — premium placements cost more than broad ones.
- Targeting breadth — very narrow audiences often carry a higher CPM.
How to read CPM
CPM on its own is neither good nor bad — a high CPM can still be profitable if those impressions convert well, and a low CPM is worthless if it reaches the wrong people. Read CPM alongside CTR, CPA and ROAS. A rising CPM with a falling CTR is a classic sign of ad fatigue.
How Floowzy helps
Floowzy tracks CPM next to CTR, CPA and ROAS across platforms in one currency and flags the rising-CPM, falling-CTR pattern as an ad-fatigue signal — so cost creep is caught early, not at month-end.
Frequently asked questions
- What is a good CPM?
- It varies hugely by platform, audience, country and season, so there's no universal number. Judge CPM against your own history and, more importantly, against whether those impressions convert — a higher CPM that drives profitable sales beats a cheap CPM that doesn't.
- What's the difference between CPM and CPC?
- CPM is the cost per 1,000 impressions (you pay to be seen); CPC is the cost per click (you pay for the action). CTR links them: CPC ≈ CPM ÷ (10 × CTR%).
- Why is my CPM rising?
- Common causes are increased audience competition, seasonal demand, narrow targeting, or declining ad relevance as a creative fatigues. If CPM rises while CTR falls, suspect fatigue and refresh the creative.