What is CPM?
Cost per mille, or CPM, is what an advertiser pays for one thousand impressions of an ad, regardless of whether anyone clicks it.
Updated
CPM is the price of attention, and on Meta it is set by an auction you share with every other advertiser chasing the same people. You influence it, but you do not control it.
Three things move it most. Audience: the narrower and more contested the segment, the higher the price. Season: Indian festive periods and wedding season pull large budgets into the auction and CPMs climb accordingly. Creative: ads that hold attention earn better delivery, which the auction rewards with cheaper impressions for the same result.
The mistake worth avoiding is treating CPM as a target in its own right. You can always buy cheaper impressions by broadening targeting or shifting to lower-quality placements, and you will usually find the conversion rate falls faster than the CPM does. CPM is best read alongside CTR and conversion rate: cheap impressions that nobody acts on are not a saving. When we review an account we look at what a thousand impressions eventually earned, not what they cost.
How CPM is calculated
CPM = (Ad spend ÷ Impressions) × 1,000
A worked example
A kidswear brand spends ₹85,000 on Meta in a month and its ads are shown 4,25,000 times.
- Ad spend = ₹85,000
- Impressions = 4,25,000
- (₹85,000 ÷ 4,25,000) × 1,000 = ₹200
CPM = ₹200 per thousand impressions.
Common mistakes
- Treating a rising CPM as automatic bad news. If the platform is finding more valuable audiences, a higher CPM with a higher conversion rate is a better deal.
- Comparing CPM across categories or seasons. Festive and wedding-season auctions in India price very differently from a quiet March.
- Optimising to lower CPM by broadening targeting until the audience stops converting.
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