The CPM Formulas
- CPM = cost / impressions × 1,000
- Cost = CPM × impressions / 1,000
- Impressions = cost / CPM × 1,000
CPM is the common currency for display, video, social and sponsored newsletter placements. Even platforms that bill per click report an effective CPM, which is useful when you compare a click-billed campaign with an impression-billed sponsorship.
Worked Example: From Budget to Pipeline
Illustrative numbers for a B2B LinkedIn campaign:
- Budget 6,000 at a quoted CPM of 30 buys 200,000 impressions.
- At a 0.6% CTR that is 1,200 clicks (check with the CTR calculator).
- If the landing page converts 4% of those visitors, you get 48 leads, a cost per lead of 125 (see the cost per lead calculator).
The chain shows where the real gains are. Halving the CPM saves money, but doubling the landing page conversion rate has the same effect on cost per lead and also improves every future campaign that sends traffic to that page.
Why a Cheap CPM Can Be Expensive
Low CPMs usually mean broad targeting or low-attention placements. For a B2B company with a defined ICP, most of those impressions land on people outside the buying committee. Judge channels on what happens after the click: which companies arrive and whether they engage. Visitor identification shows which accounts a campaign actually brought to the site, and our guide to the B2B marketing funnel covers the conversion steps to track after that.
Frequently Asked Questions
How do you calculate CPM?
Divide the total cost by the number of impressions and multiply by 1,000. Spending 1,500 on 200,000 impressions is a CPM of 7.50.
What does CPM stand for?
Cost per mille, mille being Latin for thousand. It is the price of 1,000 ad impressions.
How do I calculate how many impressions my budget buys?
Divide the budget by the CPM and multiply by 1,000. A 1,500 budget at a 7.50 CPM buys 200,000 impressions. Use the "Find impressions" tab.
What is the difference between CPM and CPC?
CPM is what 1,000 impressions cost; CPC is what one click costs. They are linked by CTR: CPC = CPM / (1,000 × CTR). A 7.50 CPM with a 0.5% CTR works out to a 1.50 CPC.
Is a low CPM good?
Only if the impressions reach the right people. Broad audiences are cheap per thousand and expensive per qualified visitor. For B2B, compare channels on cost per qualified lead or cost per opportunity, not CPM.