What Is CPM in Digital Marketing?

CPM stands for Cost Per Thousand Impressions (with “M” being the Roman numeral for 1,000). It’s one of the most commonly used pricing models in display advertising, where advertisers pay a set amount for every 1,000 times their ad is shown—regardless of whether someone clicks on it or not.

So, if the CPM is ₹100, and your ad gets 10,000 impressions, you’ll be charged ₹1,000.

How Does CPM Work?

CPM is all about visibility. It doesn’t measure clicks, conversions, or engagement—it simply tells you how much you’re paying to be seen. Here’s how it typically plays out:

  • You set a CPM bid when running a display campaign

  • Your ad enters an ad auction on platforms like Google Ads or Facebook Ads

  • Every time your ad loads (an impression), it counts toward your total

  • After 1,000 impressions, you’re billed for the CPM rate

👉 Ideal for brand awareness campaigns where the goal is exposure over clicks.

CPM vs. CPC: What’s the Difference?

Here’s a quick side-by-side:

Metric CPM CPC
Stands for Cost Per Thousand Impressions Cost Per Click
You pay for Every 1,000 views Every actual click
Best for Awareness Traffic & conversions

If your goal is visibility, CPM is your model. If you care more about user action, CPC (Cost Per Click) is likely the better fit.

Where Is CPM Used?

You’ll often see CPM used in:

Since you’re paying for impressions, platforms usually prioritize viewability—meaning the ad should be in a visible spot, not buried in the footer or skipped over by bots.

Is CPM Right for Your Campaign?

Go for CPM if:

  • You want to build brand awareness

  • You care about reach and visibility

  • You’re testing creative elements and want eyeballs first

Avoid CPM if your campaign is strictly conversion-focused. In that case, look into CPC or CPA (Cost Per Acquisition) models.

Related terms: CTR (Click-Through Rate), CPC (Cost Per Click), Run of Site (ROS), Run of Network (RON)

Back to Glossary Index Page