Cost per thousand impressions (CPM)
CPM is what you pay the ad platform for your ad to appear on screen a thousand times, whether people click or not. Calculate it by dividing spend by impressions and multiplying by a thousand. It's the price of reaching people alone, not a measure of ad quality or campaign profit.
Also calledCPMCost per thousandImpression costCost per thousand impressionsThousand impression rate
The formula
CPM = (Ad spend ÷ Impressions) × 1,000
- Ad spend: what you paid the platform in the period measured.
- Impressions: how many times the ad showed on screen, not how many people; one person may be counted multiple times.
- Result is in your currency: 200 DZD means a thousand impressions cost you 200 DZD.
Worked example
What do a thousand impressions actually cost?
- 1One-week campaign in Algeria: 30,000 DZD spend.
- 2Impressions logged: 150,000.
- 3CPM = (30,000 ÷ 150,000) × 1,000 = 200 DZD.
- 4Clicks: 3,000, so click-through rate is 2%.
- 5Cost per click = 30,000 ÷ 3,000 = 10 DZD.
Takeaway: A thousand impressions at 200 DZD with 2% CTR gives a 10 DZD click cost; if CTR drops to 1%, each click costs 20 DZD at the same impression price.
What it means in practice
Impression price is not a number you control directly. Bidding on the same audience sets it: the narrower your targeting or the busier the season, the higher the price. So comparing CPM between countries or seasons tells you about the auction market at that moment, not the quality of your work.
High CPM is not bad in itself. A narrow, expensive audience that buys more may be cheaper per delivered order than a broad, cheap audience that doesn't. The right call is on delivered order cost, and CPM is just one piece of it.
Platforms count impressions, not people. In a small campaign to a tight audience one person may see your ad five times, so impressions climb but reach stays flat, and fatigue shows in a falling click rate while CPM holds steady.
Common mistakes
- Chasing cheaper CPM by expanding audience endlessly: impressions get cheaper but delivered-order cost climbs because the audience doesn't care.
- Comparing CPM between platforms or countries and calling it a judgment on the campaign, when each auction is its own market.
- Reading CPM hours after launch and pulling the campaign before distribution settles.
- Forgetting that raising budget in one shot raises CPM, because the platform has to buy expensive impressions fast.
Questions and answers
What's the difference between CPM and cost per click?
CPM is the price to show your ad a thousand times. Cost per click is what you pay per click. The first is the price of reaching people, the second is the price of a visitor. They're linked by click-through rate: higher CTR at the same CPM lowers cost per click.
Does high CPM mean my campaign is failing?
No. CPM reflects the auction for the audience you picked, not your ad's quality. A campaign with high CPM can be most profitable if the audience is tight and confirmation and delivery rates are high. Judge delivered-order cost first.
Why did my CPM spike suddenly?
Three common reasons: seasonal competition raises the auction, or your tight audience is exhausted so supply is limited, or a sudden budget raise forces the platform to buy expensive impressions. Check your changes from the last two days first.
How do I lower CPM without hurting results?
Try new creative first—an ad that stops the scroll and gets engagement gets cheaper impressions. Then expand your audience gradually, not all at once, and track delivered-order cost after each step.