What is CPM?
CPM stands for cost per mille, or cost per thousand. It's what 1,000 impressions cost, and it's how most ads and many sponsorships are priced. Impressions are the times something was shown, so one person can count more than once.
Because it's a rate, CPM lets you compare a $200 Story with a $2,000 YouTube integration on equal terms. A higher price isn't a worse deal if it reaches far more people.
The CPM formula, and CPC and CPA
CPM = cost ÷ impressions × 1,000. Cost = impressions ÷ 1,000 × CPM. Impressions = cost ÷ CPM × 1,000. A $500 campaign with 40,000 impressions has a $12.50 CPM.
Add clicks and conversions to see what happened after people saw it:
- CPC (cost per click) = cost ÷ clicks
- CPA (cost per acquisition) = cost ÷ conversions
- CTR = clicks ÷ impressions × 100
- Conversion rate = conversions ÷ clicks × 100
Pricing a sponsorship by CPM
Brands often think in CPM even when you quote a flat fee. To price a post, take the views it usually gets, not your follower count, and multiply by a CPM. If your Reels average 30,000 views and you charge a $20 CPM, that's 30 × $20 = $600.
Creator CPMs vary a lot. As a rough guide at the time of writing, broad entertainment content often lands around $5 to $15, while finance, tech and B2B audiences can command $20 to $50 or more, because the products cost more. A dedicated video earns more than a quick mention. Treat these as starting points and adjust for your own results.
CPM, CPC or CPA: which to agree to
CPM pays for attention. CPC pays for visits. CPA pays only for results, like sales or sign-ups. Brands like CPA because the risk sits with you, while creators usually prefer a flat fee or CPM, since you can't control the brand's checkout page.
A fair middle ground is a flat fee plus a performance bonus, such as a set amount for every sale over a target. Use a tracked link so both sides see the same numbers.
Frequently asked questions
How do you calculate CPM?
Divide the cost by the impressions and multiply by 1,000. $300 for 25,000 impressions is a $12 CPM.
What is a good CPM?
It depends on the platform and audience. Paid social ads often run roughly $5 to $15. Lower isn't always better: a cheap CPM that gets no clicks is still wasted money.
Is CPM the same as RPM?
No. CPM is what the advertiser pays per 1,000 impressions. RPM is what a creator earns per 1,000 views after the platform's cut, so it's lower.
Should I use views or followers for CPM?
Use views or impressions. Followers only tell you who could see a post, not who did.
What does CPA mean?
Cost per acquisition: the total cost divided by the number of sales, sign-ups or other conversions you're counting.