Skip to content

CPC and CPM: cost per click and per thousand impressions

CPC is the cost per click, CPM is the cost per 1000 impressions. Use them together with CTR, CVR, CPA/ROAS, and viewability to evaluate both traffic and the quality of media buying.

What the metrics measure

The efficiency of media buying: how much a click or the delivery of 1000 impressions costs across channels and placements. They make it possible to compare creatives and targeting and to identify points of diminishing returns.

Calculation

  • CPC = Spend / Number of clicks
  • CPM = Spend / Impressions × 1000
  • CPA ≈ CPC / CVR; CPC ≈ CPM × CTR / 1000
  • Max CPC = Target CPA × CVR
  • Max CPM = Max CPC × (1000 / CTR)
  • Derived metrics: eCPM, CPV, vCPM (viewable impressions)

Compare on equal terms: a single currency/period, fraud removed, uniform viewability rules, and VAT excluded.

Calculation example

A campaign got 200,000 impressions and 3,000 clicks for 30,000. CPM = 30,000 / 200,000 × 1,000 = 150, CPC = 30,000 / 3,000 = 10, CTR = 3,000 / 200,000 × 100 = 1.5%. With a 2% website conversion rate the cost per lead is 10 / 0.02 = 500.

Data sources

Platform data (spend, clicks, impressions), MMP/web analytics (UTM), anti-fraud and viewability/brand safety tools, CRM/billing for downstream CPA/ROAS metrics.

Interpretation

  • A low CPC is valuable only with an acceptable CVR/CPA
  • A low CPM must be accompanied by an acceptable CTR, viewability, and frequency control
  • Changes in CPC/CPM reflect competition, creative fatigue, and audience saturation
  • Evaluate together with ROAS/ROMI and incrementality

Useful breakdowns

  • Channels / campaigns / creatives / keywords
  • Placements / formats (video, display, search)
  • Audiences, geo/language, devices/browsers
  • Impression frequency, brand vs. non-brand

Dashboard visualizations

  • CPC/CPM/CTR trends by month
  • Scatter: CPM (X) vs. CTR (Y), size — impressions
  • CPC distribution by keyword/audience
  • Scaling curve: budget → CPC/click volume
  • CPC → CPA and CPM → Reach/Frequency chain

How to set targets

Derive maximum CPC/CPM from CPA/ROAS targets and historical CTR/CVR; set viewability and frequency thresholds, a creative refresh schedule, and rules for excluding low-quality placements/audiences.

Common mistakes

  • Optimizing only for a low CPC/CPM without controlling CPA/ROAS
  • Ignoring viewability, fraud, and brand safety
  • Comparing different formats without normalization
  • No frequency caps
  • Mixing currencies/periods and including VAT

Questions for discussion

  • What max CPC/CPM follows from your CPA/ROAS and CTR/CVR?
  • Where is the point of diminishing returns with +20% budget?
  • Which creatives/audiences deliver the best combination of CPM↓ → CTR↑ → CPC↓ → CPA↓?
  • How do frequency and creative refreshes affect CPC/CPM and ROAS?

Questions and answers

How do you calculate CPC?

CPC = advertising spend / number of clicks. It shows what one visit to the website costs.

How do you calculate CPM?

CPM = advertising spend / number of impressions × 1,000. It is used for reach campaigns and to compare audience cost.

Which is better: paying per click or per impression?

Paying per click suits campaigns that drive enquiries to the website; per impression suits awareness. In the end compare the cost per lead and per customer.