The cost per mille formula
CPM = total cost ÷ impressions × 1,000. "Mille" is Latin for a thousand, so CPM is the price of 1,000 impressions. Google's help pages write the same formula as cost ÷ (impressions ÷ 1,000).
Rearranged, it answers the two other questions a media plan asks:
| To find | Formula | Example |
|---|---|---|
| CPM | cost ÷ impressions × 1,000 | $500 ÷ 100,000 × 1,000 = $5 |
| Total cost | CPM × impressions ÷ 1,000 | $5 × 100,000 ÷ 1,000 = $500 |
| Impressions | cost ÷ CPM × 1,000 | $500 ÷ $5 × 1,000 = 100,000 |
From CPM to cost per click
Impressions are not visits. To compare a CPM campaign with one you pay per click, bring in the click-through rate: clicks = impressions × CTR, and CPC = cost ÷ clicks, which is the same as CPM ÷ (1,000 × CTR). A $5 CPM at a 0.5% CTR works out to $1 a click; at a 0.1% CTR the same CPM costs $5 a click.