Enter any two of cost, impressions and CPM to get the third. Add clicks and purchases to see what your CPM really costs per order.
CPM formula
CPM = (total cost ÷ impressions) × 1,000
total cost = CPM × impressions ÷ 1,000
impressions = total cost ÷ CPM × 1,000
Example: $500 of spend delivered 40,000 impressions, so the CPM is $500 ÷ 40,000 × 1,000 = $12.50.
From CPM to cost per purchase
CPM is only the top of the funnel. What you pay for an order depends on how many impressions become clicks, and how many clicks become purchases:
cost per purchase = CPM ÷ (1,000 × CTR × conversion rate)
| CPM | $12.50 |
|---|
| CTR (600 clicks ÷ 40,000 impressions) | 1.5% |
|---|
| CPC | $0.83 |
|---|
| Conversion rate (15 purchases ÷ 600 clicks) | 2.5% |
|---|
| Cost per purchase | $33.33 |
|---|
That last line is the one to compare with your break-even CPA. If one order leaves $28 after product, shipping and fees, a $33 cost per purchase loses money even with a "normal" CPM. Use the ROAS calculator to find your break-even CPA.
Four levers when CPM rises
- Creative: ads that people engage with tend to get cheaper delivery and a higher CTR, which lowers CPC even at the same CPM.
- Audience: very narrow audiences compete for the same people; broader targeting usually gives the algorithm cheaper inventory.
- Conversion rate: trust signals, clear policies and a fast product page turn the same clicks into more purchases.
- Order value: post-purchase upsells and bundles raise revenue per order, so each expensive impression pays back more.
Frequently asked questions
- What is CPM?
- CPM means cost per mille: what you pay for 1,000 ad impressions. It's how Meta, TikTok and most display networks price reach. A $12.50 CPM means every 1,000 times your ad is shown costs $12.50.
- How do you calculate CPM?
- CPM = (total cost ÷ impressions) × 1,000. $500 spent on 40,000 impressions is a $12.50 CPM. Rearranged, cost = CPM × impressions ÷ 1,000 and impressions = cost ÷ CPM × 1,000.
- What's the difference between CPM and CPC?
- CPM is the cost of 1,000 impressions; CPC is the cost of one click. They're linked by click-through rate: CPC = CPM ÷ (1,000 × CTR). A $12.50 CPM with a 1.5% CTR gives a CPC of about $0.83.
- Is a lower CPM always better?
- No. Cheap impressions from an audience that doesn't click or buy cost more per purchase than expensive impressions that convert. Judge campaigns on cost per purchase against your break-even CPA, and use CPM to diagnose why that cost moved.
- Why is my CPM going up?
- Common causes are a narrower audience, more advertisers competing for the same people (Q4 and Black Friday are the classic case), ad fatigue lowering engagement, and placements that cost more. Compare CPM week over week alongside CTR to tell them apart.
- How do I get from CPM to cost per purchase?
- Cost per purchase = CPM ÷ (1,000 × CTR × conversion rate). Enter clicks and purchases in the calculator and it does this for you, so you can compare it with your break-even CPA.