CPM is the cost to deliver one thousand impressions. In performance marketing, it is both a pricing model and a normalization metric. Use it to understand the cost of reaching a defined audience and to compare supply across channels.

Formula and quick checks

• Formula: CPM = total cost ÷ (impressions ÷ 1,000). Example: $12,000 spend for 3,000,000 impressions = $4.00 CPM.
• Invert when needed: Impressions = (spend ÷ CPM) × 1,000. Useful for forecasting reach from a fixed budget.
• Compare apples to apples: Align flight dates, geo, device, and targeting before comparing CPMs across partners.

CPM in the funnel

• Upper funnel: CPM signals cost of reach and frequency management.
• Mid funnel: Pair CPM with CTR and viewability to judge quality of attention.
• Lower funnel: CPM alone is insufficient; use CPC, CPA, ROAS, and conversion rate to validate outcomes.

Supply factors that move CPM

• Inventory quality: Premium placements and high viewability usually raise CPMs.
• Audience competition: Narrow or in-demand audiences increase CPM.
• Seasonality: Auction pressure rises around major retail and cultural events.
• Buying method: Programmatic open exchange often shows wider CPM variance than curated PMPs or direct IOs.

CPM helps diagnose efficiency, but it should not be optimized in isolation. A low CPM that delivers unviewed or untargeted impressions can be more expensive per outcome.

Practical benchmarks

• Display: Often mid–single digit to low teens CPM depending on viewability and targeting.
• Online video: Typically higher than display due to completion rates and attention.
• CTV/OTT: Highest CPMs, reflecting premium long-form inventory.

Treat these as directional. Your audience, geography, and supply path drive real numbers.

Quality checks to pair with CPM

• Viewability: Track viewable CPM (vCPM) to pay for impressions that can actually be seen.
• Click and engagement: CTR and cost per engaged view help filter cheap but low-quality reach.
• Outcome alignment: Monitor CPA or ROAS to confirm CPM savings translate to business results.
• Brand safety and fraud: Invalid traffic and unsafe placements can artificially deflate CPM.

When to prioritize CPM

• Reach and frequency goals with clear audience definitions.
• Top-of-funnel blitzes where scale in a short window matters.
• Cross-channel planning where you need a common denominator to compare partners.

Use CPM to forecast, negotiate, and optimize without losing sight of outcomes.

Planning moves

• Forecast spend and reach: Start from target impressions and allowable CPM to back into budget. Example: 20,000,000 impressions × $6.50 CPM ≈ $130,000.
• Normalize plans: Convert all partner proposals into CPM to compare scale and cost consistently.
• Set guardrails: Define minimum viewability and maximum frequency to keep cheap CPMs honest.

Optimization playbook

• Bid and supply path tuning: Remove high-fee paths, prefer SSPs with better win rates and viewability.
• Creative and format testing: Upgrade creative quality and test sizes/lengths that earn higher attention at similar CPMs.
• Targeting refinement: Tighten or expand audiences to balance CPM against CPA/ROAS.
• Deal type selection: Use PMPs for quality control; open exchange for scale testing; direct IOs for fixed CPM predictability.
• Pacing and seasonality: Front-load before cost spikes or shift budget to periods with softer auctions.

Reporting tips

• Always show CPM alongside CTR, vCPM, CPA, and conversion rate.
• Highlight effective CPM (eCPM) across buys to compare net outcomes after fees or makegoods.
• Flag anomalies: Sudden CPM drops with rising invalid traffic or falling viewability warrant a review.