Glossary · CPM (cost per mille)
What is CPM (cost per mille) in advertising?
CPM (cost per mille) is the price an advertiser pays for 1,000 impressions of an ad.
FormulaCPM = total campaign spend / number of impressions x 1,000
Short answer. CPM, cost per mille, is what you pay for 1,000 impressions of your ad: total spend divided by impressions, times 1,000. It measures the price of attention, not whether that attention did anything.
Definition
AppsFlyer defines CPM as "the price an advertiser pays for 1,000 impressions of their ad on an app or web page," with "mille" being Latin for thousand. Google Ads describes CPM bidding as "a way to bid where you pay per one thousand views (impressions)" on its Display Network, and notes that viewable CPM (vCPM) bidding "ensures that you only pay when your ads can be seen."
Even where you bid for installs or purchases, impressions are often what you are billed on. AppsFlyer notes that self-reporting networks such as Facebook, Google and Snap "will charge advertisers based on CPM ... while optimizing towards eCPI."
Formula
CPM = total campaign spend / number of impressions x 1,000
It links to the other cost metrics: CPI = CPM / IPM, and cost per click = CPM / (10 x CTR in percent).
Worked example (illustration)
These are made-up round numbers. You spend $3,000 and get 500,000 impressions. CPM = $3,000 / 500,000 x 1,000 = $6.00. If those impressions produce 1,500 installs, IPM is 3 and CPI is $6.00 / 3 = $2.00. A second campaign at a $9.00 CPM with an IPM of 6 has a CPI of $1.50: dearer impressions, cheaper installs.
What a good or bad reading tells you
AppsFlyer is clear that CPM rates "vary greatly depending on platform, location, industry, and external trends," and that "it's not just about finding the lowest CPM." A rising CPM can mean more competition (seasonal peaks), a narrower audience, or an ad the platform is less keen to show. A low CPM with a poor conversion rate is usually cheap inventory that does not convert.
We give no benchmark CPM. Figures change by quarter, country, platform and placement.
How it is used in app, game and brand advertising
Media buyers watch CPM to understand the price side of performance and to spot auction pressure. Creative teams should watch it too: Google, for example, says expected CTR "is a component of Ad Rank," and AppsFlyer notes in-app networks rank campaigns by eCPM, so how people respond to an ad affects how it is delivered. For both games and consumer brands, CPM is the input; installs or purchases per thousand impressions is where the creative earns its keep.
Common mistakes
- Chasing the lowest CPM. AppsFlyer's own example: Instagram may cost more per thousand than X, but can still achieve higher ROAS for the right audience.
- Confusing CPM (advertiser cost) with eCPM (publisher revenue).
- Comparing CPMs across placements or seasons as though they were one market.
- Blaming media for a CPI rise that is really an IPM drop.
Flixr's view
Our view: you rarely control CPM much, but you control what happens per thousand impressions. That is why the result we aim for is more conversions per thousand impressions, and why we think running the same ad on every platform wastes the impressions you pay for.
Questions people ask
How do you calculate CPM?
Divide total spend by impressions and multiply by 1,000. $1,500 for 750,000 impressions is a $2 CPM.
What is the difference between CPM and eCPM?
CPM is what advertisers pay per 1,000 impressions. eCPM, per AppsFlyer, is the revenue a publisher earns per 1,000 impressions.
Is a lower CPM always better?
No. A cheaper impression that rarely converts can produce a higher cost per install or purchase than a dearer one that converts well.
Related terms
Sources