If you have spent any time running paid digital ads like on Meta, Google or LinkedIn, you have probably come across the acronym “CPM”. It’s one of those marketing metrics that gets thrown around constantly, but is often misunderstood. Let’s unpack what CPM means, why it matters and where it fits into a broader digital advertising strategy.

The basics: what CPM actually means

CPM stands for Cost Per Mille, with “mille” being Latin for one thousand (…no, it’s not million!).

Put simply, it is the price you pay for 1,000 ad impressions. An impression is counted every time your ad is shown on someone’s screen, regardless of whether they click, engage, or even really notice it.

For example, if you spend £10 and your ad is shown 2,000 times, your CPM would be £5. The formula is straightforward:

CPM = (Total Ad Spend ÷ Impressions) x 1,000

This makes CPM one of the most common ways to measure the cost of awareness-driven advertising.

Why CPM matters

Unlike CPC (Cost Per Click) or CPA (Cost Per Acquisition), CPM is not focused on immediate action. Instead, it is all about reach and visibility. CPM is especially relevant when your campaign objective is to:

• Build brand awareness

• Increase visibility among a target audience

• Ensure your creative is seen by as many people as possible

What is a good CPM?

Here is where it gets tricky. A “good” CPM depends heavily on the platform, the audience, and the competitiveness of your industry. For example:

• Meta ads: UK averages tend to sit anywhere between £3 and £8 CPM, though niche targeting can push it higher. It also massively depends on the objective you select.

• Google Display Network (GDN): Often cheaper, with CPMs as low as £1 to £3.

• LinkedIn ads: Expect to pay significantly more, £20+ CPM is common, thanks to the platform’s B2B audience. Again, this generally changes with objectives, with reach/awareness yielding much lower CPMs and conversion objectives higher.

So, context is everything. A £20 CPM on LinkedIn might actually be more valuable if you are reaching the right CEOs and decision-makers, compared to a £3 CPM showing your ad to a broad, less relevant audience.

The pitfalls of CPM

While CPM can be a useful metric, it is far from perfect. The danger comes when marketers obsess over low CPMs without considering quality. After all, what is the point of a £2 CPM if your ad is being shown to the wrong people, at the wrong time, in the wrong placements?

There is also the issue of viewability. An impression is counted even if your ad appeared for half a second at the bottom of someone’s screen. That is hardly meaningful exposure. So, you could run ads on Google Display Network (GDN), and have million of impressions with a low CPM – but few actually looked at your ad. So while CPM gives you a sense of cost efficiency, it does not tell you whether those impressions actually drove impact.

How CPM fits into strategy

The smartest way to use CPM is alongside other metrics. For awareness campaigns, a low CPM is encouraging as it means you are reaching a lot of people for a reasonable cost. But you should also keep an eye on engagement rates, brand lift, and ultimately whether that visibility leads to conversions down the line.

For performance-driven campaigns such as eCommerce or lead generation, CPM is less important than CPC or CPA. But it can still provide useful context. For example, if your CPC is creeping up, it might be worth checking whether a rising CPM is part of the story.

CPM should often be measured as a median over the lifetime of a campaign or account. Again, using it to tell a story of cost changes. An example of changes in CPM to your median may be during Q4, where Black Friday/Cyber Monday and Christmas Holiday creates a unique tilt in the supply/demand of adspace, causing it to become more expensive. Thus, CPM rises.

To summarise…

At its core, CPM is simply a measure of how much it costs to get your ad in front of 1,000 eyeballs. It is not the be-all and end-all of digital marketing, but it is a vital piece of the puzzle when it comes to brand awareness and reach campaigns.

The key is not to treat CPM in isolation. A cheap CPM might look good on paper, but if those impressions are not reaching the right people, it is wasted spend. Conversely, a higher CPM could be worth every penny if it delivers your message to exactly the right audience.

In digital advertising, numbers never tell the full story on their own, and CPM is no exception. It is all about balancing cost efficiency with audience quality, creative impact, and long-term business goals.