CPM (Cost per mille)

What is CPM (Cost per mille)?

CPM stands for "Cost per mille", where "mille" means thousand in Latin. You use CPM as a standard measure of the price of 1,000 impressions of an ad. In other words, CPM shows how much you pay to have your ad shown a thousand times, whether or not anyone clicks on it. That makes CPM a key concept in digital advertising, because you can use it to compare the price of reach across channels.

You come across CPM in many forms of advertising – from display ads on websites to paid campaigns on social media such as Facebook and LinkedIn. When you work with digital strategy and media mix, CPM gives you a common starting point for comparing investment and exposure between different platforms.

In this way, CPM contrasts with pricing structures such as CPC (Cost per Click), where you only pay for actions. In branding campaigns, where the goal is to create visibility rather than conversions, CPM is the more obvious choice, because you pay for visibility instead of interaction.

How do you use CPM?

You use CPM to plan and manage how far your ad budget goes in terms of the number of impressions. When you know what you pay per thousand impressions, you can easily calculate how many people you can potentially reach for a given amount. This becomes especially useful when you combine CPM with SEO or content efforts, where you want to build awareness and attention around a brand rather than direct sales.

With CPM as your pricing model, you pay for impressions, not for engagement. This means you can use it to measure the effectiveness of your branding and top-of-funnel marketing. You can also use CPM to evaluate which channels deliver the best balance between exposure and cost when you plan your overall media budget.

Why is CPM important?

CPM is important because it gives you a consistent way to compare costs across platforms and campaigns. When you work with several channels – for example Google Display, Meta Ads and influencer marketing – CPM helps you assess where you get the most attention for your money. It's not just about lowering the price, but also about optimising the impact of every impression budget.

In a branding context, CPM is a key part of your strategic planning. You can use it to track how impressions develop over time and thereby understand how much exposure you achieve for your investment. That way, you get a better understanding of how your paid activities interact with, for example, your organic channels or your overall brand awareness strategy.

What types and variants are there?

There are several variants of CPM, each adapting the model to different purposes. The most common are:

• Viewable CPM (vCPM): You only pay when the ad is actually visible on screen, which reduces waste and ensures you only pay for impressions that have real value.
• Target CPM (tCPM): You set a target price per thousand impressions, and the ad network continuously optimises to hit that average price while maximising reach.
• eCPM: Effective CPM, used to compare CPM with other pricing models such as CPC. It is calculated from click-through rate and cost and gives an overall picture of the campaign's effectiveness.

How do you work with CPM in practice?

You calculate CPM using a simple formula that shows the relationship between campaign spend and number of impressions:

CPM = (Total campaign costs / Number of impressions) x 1000

The formula makes it easy to compare prices between different ads or channels. If, for example, you have a budget of DKK 15,000 and achieve 2,400,000 impressions, your CPM comes to DKK 6.25. This type of calculation gives you the basis for assessing the effectiveness of your investment.

Examples:

In practice, you use CPM to benchmark the performance of your channels. When you assess whether Facebook or Google Display gives the most visibility for your money, you compare CPM across campaigns. You can use that insight to reallocate budgets or adjust your strategy, so you get as much exposure as possible for every penny invested.

If you also work with branding or content production, you can use CPM to measure how your creative elements affect visibility. A low CPM may indicate that your ad content is reaching the target audience effectively, while a high CPM may be a signal to optimise your advertising or targeting.

What should you be aware of?

Although CPM gives a clear picture of the cost per impression, it tells you nothing about engagement or impact. You should therefore look at CPM alongside other KPIs such as CTR, conversion rate and ROAS when you assess the success of campaigns. This is especially important if you use CPM in channels where visibility doesn't automatically lead to action.

Also be aware that CPM can vary considerably depending on target audience, ad format and time of year. For example, competition in ad auctions affects the price across platforms such as Google Ads and Meta. That's why you should monitor developments continuously, test different target audiences and optimise based on data. This ensures that your CPM remains a meaningful and effective metric in your overall marketing efforts.