Definition
"Mille" is Latin for thousand; the unit was inherited from print and broadcast, where ad space was priced per thousand readers or viewers. Online, an impression is one rendering of the ad in a browser or app. A campaign that spent $250 on 500,000 impressions ran at a CPM of $0.50 (250 ÷ 500 thousand-impression blocks). The model suits formats where the publisher gives up space or attention regardless of the visitor's reaction, which is why display and pop inventory is sold this way.
Formula and a worked example
CPM = total cost ÷ impressions × 1,000
Cost = CPM × impressions ÷ 1,000A popunder campaign bids a CPM of $0.40 and delivers 1,200,000 impressions in a day. Its cost is $0.40 × 1,200,000 ÷ 1,000 = $480. If 600 of those impressions converted, the cost per conversion is $480 ÷ 600 = $0.80. The buyer compares that with the offer payout to decide whether to raise or lower the bid.
CPM vs CPC vs CPA
| Model | Billable event | Risk sits with | Typical formats |
|---|---|---|---|
| CPM | Impression | Advertiser (pays whether or not visitors act) | Pop, banner, video, interstitial, redirects |
| CPC | Click | Shared | Push, in-page push, native, search |
| CPA | Conversion | Publisher or network | Offers, SmartCPA campaigns |
Networks also sell SmartCPM, where the platform lowers the winning bid to just above the next competitor so the advertiser never overpays for an uncontested impression, and SmartCPA, where the buyer sets a target cost per conversion and the platform adjusts CPM bids toward it.
When CPM is the right model
When the format has no click to bill (popunders, redirects), when the advertiser wants reach and frequency rather than clicks (video, banners), and when the advertiser's own tracking is good enough to judge the traffic by conversions rather than by clicks. Buyers convert CPM into effective CPC or CPA after the fact to compare it with other channels; the glossary entry for eCPM covers the publisher's side of the same conversion.
Related terms
| Term | Relation | Where defined |
|---|---|---|
| CPC | Click-based alternative | Term page |
| CPA | Conversion-based alternative | Term page |
| eCPM | Publisher-side equivalent | Term page |
| Popunder ads | The main CPM format on pop networks | Term page |
FAQ
What does CPM stand for?
Cost per mille, mille being Latin for thousand: the cost of one thousand ad impressions.
Is a low CPM always better?
No. A low CPM on traffic that does not convert costs more per result than a higher CPM on traffic that does. Judge by cost per conversion.
What is SmartCPM?
A bidding mode where the platform charges just above the next-highest competing bid instead of your full bid, so you win the same impressions for less when competition is thin.