The CPM formula
CPM means cost per mille — mille is Latin for one thousand — so CPM is simply the price of one thousand ad impressions. It is the standard currency of display, video and programmatic advertising because it lets you compare wildly different campaigns on the same scale. The core formula is:
Because there are three quantities, the formula rearranges two more ways so you can solve for whichever value you're missing:
These three identities are exactly what the calculator above switches between when you change the “What do you want to find?” mode.
Worked example
Suppose you run a display campaign and spend $500, which delivers 200,000 impressions. To find the CPM you paid:
Now flip it around. If a publisher quotes a $4 CPM and you have a $1,000 budget, your reach is ($1,000 ÷ $4) × 1,000 = 250,000 impressions. This is how media buyers translate a fixed budget into expected exposure before a campaign even starts.
Typical CPM ranges by channel
CPMs vary enormously by platform, format, season and how tightly you target. The figures below are broad industry ranges to give a sense of scale — your actual rates depend on auction competition and audience.
| Channel | Typical CPM range | Notes |
|---|---|---|
| Display / banner | $1 – $5 | Cheapest reach; quality varies widely |
| Social feed (Meta, etc.) | $5 – $15 | Strong targeting raises effective value |
| Online video / pre-roll | $10 – $30 | High attention, higher price |
| Connected TV (CTV) | $20 – $45 | Premium inventory, brand-safe |
| Podcast / audio | $15 – $30 | Host-read spots command a premium |
CPM vs CPC vs CPA
CPM is one of three pricing models you'll meet when buying ads, and they answer different questions:
- CPM (cost per mille) — you pay per 1,000 impressions. Best for awareness: you want as many of the right people as possible to see your message.
- CPC (cost per click) — you pay only when someone clicks. Best for traffic and direct response, where a view alone has little value.
- CPA (cost per acquisition) — you pay per conversion (a sale, sign-up or lead). Best when you can measure outcomes and want to cap spend to results.
You can convert between them once a campaign is live: if a $5 CPM placement earns a 1% click-through rate, that's 10 clicks per 1,000 impressions, so the effective CPC is $5 ÷ 10 = $0.50.