What is CPM (Cost per mille)?

Cost per mille (CPM) is the cost of one thousand ad impressions, calculated as spend divided by impressions, multiplied by a thousand. It is the base unit of what an advertiser pays for attention, and it is set by auction competition rather than by the advertiser — CPM rises when more bidders want the same audience, which is why it climbs predictably into Q4 and falls in January.

CPM alone says nothing about whether a campaign works. A low CPM on an audience that never converts is worse than a high one on an audience that does, and chasing cheap impressions is one of the most common ways to optimise a campaign into irrelevance. Its diagnostic value comes from pairing it with click-through rate: cost per click is roughly CPM divided by CTR, so a rising CPC can be traced either to auction pressure, which shows up in CPM, or to weakening creative, which shows up in CTR. That distinction determines the response, because bidding and targeting fix the first and only new creative fixes the second.