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CPM (Cost per Mille).
CPM (cost per mille) is the price for a thousand impressions of an ad. The formula: advertising costs divided by the number of impressions, multiplied by 1,000. CPM is the key currency of reach advertising on social media, YouTube and the Display Network.
CPM (Cost per Mille) — Explained in Detail
The cost-per-thousand idea comes from traditional advertising: newspaper ads and posters were already compared by what it cost to reach a thousand people. Online the unit is called CPM, where the 'M' stands for the Latin mille. If you get 30,000 impressions for CHF 150 in total, you pay a CPM of CHF 5. Whether those impressions were actually seen is a different question — that is what vCPM is for, which counts only viewable impressions.
Alongside CPM there are two other common billing models: CPC, where you pay per click, and CPA, which describes the cost per conversion. CPM is the earliest of these values and says the least about business success. It measures how cheaply you buy attention, not whether enquiries result from it. A low CPM can simply mean that the ad is being shown to an audience hardly any advertiser competes for — often for good reason.
Even so, CPM is a useful diagnostic. If it suddenly rises sharply for the same audience, competition has grown, for example before Christmas or Black Friday. If it differs greatly between two audiences, that shows how contested they are. And combined with the click-through rate, it gives you the cost per click: a higher CPM can be worth it if significantly more people click.
For SMEs, CPM is mainly relevant for campaigns whose goal is awareness, such as the opening of a restaurant or entering a new region. For campaigns aimed at enquiries or sales, CPM should not be the steering metric; the cost per enquiry or the revenue per franc spent should be.
Example: reading CPM correctly
Suppose a gym in Winterthur tests two audiences on Instagram. Audience A has a CPM of CHF 4, audience B one of CHF 9. At first glance, A looks twice as efficient. But the click-through rate for A is 0.4 per cent and for B 1.5 per cent, and significantly more people from B sign up for a trial session. Per sign-up, B is therefore cheaper — even though each contact costs more.
The lesson: CPM is an input, not a result. Only the interplay with click-through rate, conversion and order value shows which channel pays off. We do this calculation in our digital marketing consulting before any budget is shifted; for search ads we steer by cost per enquiry rather than CPM anyway as part of our Google Ads management.
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ImpressionsFrequently Asked Questions About CPM (Cost per Mille)
Advertising costs divided by the number of impressions, multiplied by 1,000. Example: CHF 240 in costs for 60,000 impressions gives a CPM of CHF 4.
There is no universally valid figure. CPM depends on platform, audience, season and format, and can vary several times over within one account. More useful than an industry benchmark is a comparison with your own previous periods and the question of what is left over per enquiry or sale.
That depends on the campaign goal. Campaigns aimed at reach or video views are usually billed per thousand impressions, Search campaigns and many traffic campaigns per click. Regardless of billing, each value can be converted into the other as long as impressions and clicks are known.
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