CPM in Marketing: Why Pay or Get Paid for Impressions

While cost-per-lead (CPL) tends to steal the spotlight, cost per mille (CPM) is often overlooked during ad strategy planning. CPM can be a gamble—after all, there’s no assurance that impressions will translate into real sales.

So why are companies still investing in CPM campaigns across platforms like Google Ads, Meta Ads, or The Trade Desk? Isn’t that a risky move?

CPM is a win for affiliates, but where does that leave advertisers?

As it happens, CPM marketing, widely known as the CPM pricing model, can be a smart move in the right scenario: when you know your audience, have strong creative assets, and can accurately measure your campaign’s performance.

Sounds a bit tricky, doesn’t it?

Let’s break down CPM marketing from the ground up—covering when to use it, how it works, and when models like cost-per-lead (CPL) or cost-per-sale (CPS) are the better bet.

Book a free demo to discover how Phonexa can optimise your ad spend using real-time data and analytics.

What Is CPM in Digital Advertising?

CPM, or cost per mille, refers to the price an advertiser pays for 1,000 ad impressions. Platforms like Google Ads or affiliate publishers display these ads to a target audience. In email marketing, CPM can also refer to 1,000 emails sent or opened by subscribers.

How the CPM Marketing Model Works

CPM campaigns function differently depending on the channel. Whether you’re bidding in real-time via platforms like Google Ads or working directly with a publisher, the approach and outcomes can vary significantly.

Option 1. CPM Campaign in Google Ads

To start a CPM campaign in Google Ads, pick an objective that allows CPM bidding. Then select your preferred ad formats, placements, target audiences, and schedule, and set your CPM bid—the amount you’re prepared to pay per 1,000 impressions.

Google Ads then conducts an auction considering CPM bids and ad relevance to decide which ads to show. Winning ads appear across the Google Display Network or YouTube, and the winning advertiser pays their CPM bid. While each ad slot has only one winner, multiple slots on the same page can feature ads from different winners.

CPM vs. vCPM Pricing Models in Google Ads

A key option in Google Ads is the vCPM model, where you only pay when at least 50% of your ad is visible for a minimum of 1 second (for display ads) or 2 seconds (for video ads). Unlike traditional CPM pricing that charges for every served ad—even those barely seen—vCPM focuses on actual viewability.

Overview of Google Ads Types and Their Pricing Models

Google Ads Type		Pricing Model
Search Ads	Responsive Search Ads (RSAs)	CPC, CPA, ROAS
	Dynamic Search Ads (DSAs)	CPC, CPA, ROAS
Display Ads	Single Image Display Ads	CPC, CPM, vCPM, CPA
	Responsive Display Ads	CPC, CPM, vCPM, CPA
Video Ads	Skippable In-Stream Ads	Cost-Per-View, CPC, CPM, vCPM
	Non-Skippable In-Stream Ads	CPM, vCPM
	In-Feed Video Ads	CPV, CPC
	Bumper Ads	CPM, vCPM
	Outstream Ads	CPV, vCPM
	Masthead Ads	CPM, Cost-Per-Day
	Pause Ads	CPM, vCPM
Shopping Ads	Product Shopping Ads	CPC, CPA, ROAS
	Local Inventory Ads	CPC, CPA
Performance Max Ads		CPC, CPA, ROAS, Maximise Conversions, Maximise Conversion Value
App Ads	App Ads for Downloads	CPI (Cost-Per-Install), CPA
	App Ads for Engagement	CPC, CPA
Discovery Ads		CPC, CPA
Local Ads (now transitioning to Performance Max ads)		CPC, CPA, Maximise Conversions
Smart Ads		CPC, CPA, Maximise Conversions
Local Services Ads	Google Guarantee	CPL
	Google Screened	CPL

Overview of Google Ads Pricing Models

Pricing Model	Number of Ad Types	Applicable Google Ads Types
CPM (Cost Per Mille)	7	Single Image Display, Responsive Display, Skippable In-Stream, Non-Skippable In-Stream, Bumper, Masthead, Pause Ads
vCPM (Viewable Cost Per Mille)	7	Single Image Display, Responsive Display, Skippable In-Stream, Non-Skippable In-Stream, Bumper, Outstream, Pause Ads
CPA (Cost Per Action)	12	Responsive Search, Dynamic Search, Single Image Display, Responsive Display, Product Shopping, Local Inventory, Performance Max, App Downloads, App Engagement, Discovery, Local, and Smart Ads
CPC (Cost Per Click)	13	Responsive Search, Dynamic Search, Single Image Display, Responsive Display, Skippable In-Stream, In-Feed Video, Product Shopping, Local Inventory, Performance Max, App Engagement, Discovery, Local, and Smart Ads
CPV (Cost Per View)	3	Skippable In-Stream, In-Feed Video, Outstream
CPI (Cost Per Install)	1	App Downloads
CPL (Cost Per Lead)	2	Google Guarantee, Google Screened
ROAS (Return on Ad Spend)	4	Responsive Search, Dynamic Search, Product Shopping, Performance Max
CPD (Cost Per Day)	1	Masthead
Maximise Conversions	3	Performance Max, Local, Smart Ads
Maximise Conversion Value	1	Performance Max

Running CPM campaigns on platforms like Google Ads or Meta Ads means you’re effectively leasing ad space on websites and apps, albeit indirectly. The key benefit of programmatic advertising through Google Ads is the ability to reach any desired audience without manually hunting for publishers across various locations.

You can also collaborate directly with publishers, a strategy that often works well when targeting niche audiences or local markets. For instance, running display ads through micro- and nano-influencers tends to be significantly more budget-friendly.

 

Option 2. CPM Marketing Campaign Through Direct Affiliate Partnerships

Direct CPM marketing tends to be more cost-efficient since it eliminates platform commission fees. For context, Google Ads charges a commission of 32% for AdSense for Content and 49% for AdSense for Search.

Executing a direct CPM marketing campaign involves selecting the appropriate publisher and negotiating details such as ad format, placement, and impression measurement. A key advantage is the ability to handpick specific websites and ad locations.

Regarding cost efficiency, the CPM rate in direct partnerships typically settles between the publisher’s asking price and the advertiser’s offer. Advertisers aim for lower CPMs, while affiliates seek to maximise earnings from ad placements.

Comparing Google Ads and Direct Affiliate Partnerships

	Google Ads	Direct Affiliate Partnership
Cost	Custom CPM bids	Negotiated CPM rates
Commission	32% to 49%	None (0%)
Targeting	Based on demographics, interests, and placements	Dependent on the publisher’s own audience
Tracking	Automated via Google’s ad servers	Manual tracking using client tools
Scale	Access to millions of websites	Limited to publishers’ websites
Risk Mitigation	Highly precise targeting options	Mitigated by careful publisher selection and niche focus

Typical CPM Rates on Various Platforms

Several factors influence the actual CPM rate, including platform type, industry, geographic location, campaign goals, competitive landscape, and more. For instance, Facebook’s CPM can start under a dollar in less competitive areas but rise to tens of dollars in high-demand regions and premium industry sectors.

Also check out: The Definitive Guide to Facebook Affiliate Marketing in 2025

Top Five Influencers on CPM Pricing

Marketers aim to reduce CPM costs while reaching audiences with strong intent. Achieving this balance requires a grasp of supply and demand dynamics, seasonal fluctuations, geographic targeting, and other key factors that influence ad pricing.

Supply & Demand	Both macro and microeconomic factors shape market demand and supply for ad space. When many advertisers vie for the same placement, competition drives CPM prices up.
Seasonality	CPM rates can fluctuate throughout the year. For example, retail advertisers aggressively compete during holidays like Easter, Christmas, Black Friday, or Valentine’s Day, often doubling CPM rates. Despite higher costs, these periods offer greater audience reach and potential sales.
Target Audience	Industry and targeting precision heavily impact CPM. Narrowing targeting by location, demographics, or behaviours shrinks the eligible inventory and increases CPM. For example, targeting broad groups like “all professionals” on LinkedIn costs less than targeting highly specific groups like “US-based C-level tech executives” due to competition intensity.
Campaign Goals	CPMs tend to be lower for awareness-focused campaigns and higher for bottom-funnel conversion goals. Top-of-funnel objectives prioritise broad reach and brand awareness with looser targeting, while bottom-funnel targets require granular demographics, driving up CPM.
Ad Format	Video and dynamic ads command higher CPMs as they attract more engagement compared to static ads, often resulting in better brand awareness and sales impact.

Improving your ad creative quality, precise targeting, and overall relevance can boost ad display frequency without the need to increase your bid.

Is CPM a Wise Choice for Marketers, or Does It Carry Too Much Risk?

Having covered the fundamentals of CPM, a key question arises: Is CPM riskier than other models like CPC, CPL, or CPA? If so, are there scenarios where paying for impressions makes more sense than paying for clicks, leads, or specific actions such as app installs or downloads?

In the realm of affiliate marketing, CPM represents the highest risk for advertisers but is generally the safest bet for affiliates and affiliate networks.

The reality is that publishers often don’t prioritise whether ad impressions lead to clicks, leads, or sales since they earn revenue regardless. Advertisers, on the other hand, pay for every impression, whether it is seen or ignored by users. Although the vCPM (viewable CPM) model helps mitigate some risk by charging only for impressions that meet visibility standards, it still offers no absolute guarantees.

Book a demo to learn how Phonexa can help you track impressions, drive leads, and elevate your lead acquisition strategy.

Drawbacks of CPM Pricing

No Guaranteed Engagement	An ad might be displayed thousands of times without generating any leads, calls, or sales. While you can track which CPM campaigns lead to clicks or conversions, you still pay based on impressions, not on actual leads or sales, unlike pay-per-lead (PPL) or pay-per-sale (PPS) models. Additionally, it’s difficult to measure the true ROI of ads that have not directly driven engagement, even if they influenced purchase decisions later on.
Need for Accurate Targeting	When paying for views, targeting the right audience is crucial, making precise targeting essential for CPM campaigns. However, the more detailed your targeting, the higher the CPM cost. Conversely, PPL and PPS campaigns often rely on pre-qualified leads or calls, reducing the need for upfront targeting.
Low Publisher Incentive	Because publishers earn revenue regardless of performance metrics such as click-through rates, lead quality, or sales, they may lack motivation to optimise ad placement, design, or collaboration with advertisers.
Poor Fit for High-Intent, Low-Volume Markets	Since CPM marketing focuses on top-of-funnel impressions, it generally yields fewer clicks and conversions. This pricing model is less effective for niches with high intent but low volume, as well as for targeting bottom-of-funnel (BoFu) customers.
Fraud Vulnerability	Fake impressions can be difficult to combat beyond halting campaigns and changing publishers. In contrast, PPC and PPS models pay for measurable results—either per lead or per sale—significantly reducing risk, with PPS eliminating it almost entirely.
High Budget Requirement	CPM demands extensive testing and a substantial budget to gather enough impressions for reliable data. In contrast, PPL and, especially, PPS models scale costs based on actual results, creating a mutually beneficial scenario for advertisers and affiliates.
Limited Effectiveness for Short-Term Campaigns	While a strong CPM campaign with engaging creatives can build brand awareness and support long-term growth, it’s generally ineffective for short-term promotions, such as seasonal sales, where immediate consumer action is crucial.

Strategies to Lower Your CPM Costs

Identify Your Target Audience	Leading CPM platforms enable targeting based on demographics, past purchases, interests, and many other factors, allowing you to show ads to the most relevant users while effectively managing your budget.
Balance Ad Frequency	While refining your audience is essential, it’s equally important to find the optimal frequency, showing ads enough to engage but not so often as to annoy viewers.
Track Engagement Metrics	Platforms like Meta Ads, Google Ads, and TikTok provide detailed analytics on interactions, including clicks, video views, likes, shares, and comments. Use these insights to invest more in high-performing campaigns and cut underperforming ones.
Use A/B Testing	A/B testing helps identify which ad elements, such as creatives, subject lines, images, CTAs, and headlines, resonate best with your audience. For example, you can run two different subject lines simultaneously to see which yields better results.

How Phonexa Can Help Make Your CPM Campaigns More Profitable

The great news is that many CPM risks—particularly those related to limited data—can be reduced or even eliminated using Phonexa’s performance and affiliate marketing software suite. This technology reveals detailed insights about your leads, including demographics, psychographics, purchase history, the ads that generated them, and other key customer journey information.

Here’s how LMS Sync can connect your CPM campaigns to real results:

1. Add Phonexa-specific tracking IDs to your ad URLs when launching CPM campaigns on platforms like Google Ads, Meta Ads, or through affiliates.
2. Build a dedicated landing page, embed Phonexa’s JavaScript tracking script, and link your ads to this page.
3. Use the LMS Sync dashboard to monitor which publisher impressions result in lead conversions.

Though LMS Sync’s main function is to capture comprehensive web lead data, it also highlights which publishers’ impressions actually convert into leads, helping you identify those generating lots of impressions but few or no leads.

 

Beyond LMS Sync, HitMetrix helps monitor post-impression user engagement on your landing pages—tracking scrolls, clicks, taps, and detecting friction points, such as click errors, bounces, rapid browsing, or mouse exits. The suite also includes session replay tools to visualise user journeys for deeper analysis and optimisation.

 

Lastly, leverage Phonexa’s predictive modelling software to forecast your campaigns’ future performance. Using AI-powered algorithms, it analyses past campaign data to deliver reliable, data-driven predictions about how different campaign configurations will likely perform.

Before tackling underperforming elements in your CPM campaigns, exploring new audiences, or entering untapped markets, you can safely simulate your strategies in a risk-free environment.

Predictive modelling allows you to focus your resources on campaigns and settings that work, rather than wasting time on ineffective ones. You’ll gain clear insights on the optimal timing and placement of your ads—and if things aren’t perfect yet, you can keep adjusting and testing until you achieve maximum impact.

 

Take a product tour to discover how Phonexa’s eight integrated performance marketing solutions work together for CPM and lead generation success.

Understanding CPM in Email Marketing

CPM pricing extends beyond ad campaigns into email marketing, where it represents the cost of sending 1,000 emails, often based on the number of emails opened rather than the total number sent. The core concept remains the same: CPM in email marketing emphasises brand awareness, with advertisers paying publishers or ad networks to feature their promotional content within newsletters.

Occasionally, CPM refers to the amount that advertisers or marketers pay email service providers (ESPs), such as Mailchimp, Constant Contact, or SendGrid, for sending emails. However, this is a delivery or operational cost, not the expense of advertising itself.

Ways Phonexa Helps Reduce Your Email Marketing CPM

By leveraging LMS Sync or Call Logic within Phonexa, you gain deep insights into your lead generation efforts, including which ads generate leads and how these leads interact with your website and calls.

What about nurturing your leads through remarketing with E-Delivery?

Since many leads don’t convert immediately, having a solid follow-up approach is essential. Integrating E-Delivery into Phonexa’s platform enables you to engage and nurture unconverted leads with targeted emails or SMS messages sent precisely when they’re most effective.

 

Elevate Your Performance & Affiliate Marketing

Whether you use CPM pricing or prefer lower-risk models like PPL or PPS, Phonexa’s all-in-one performance marketing software suite—covering email, social media, referral, affiliate, call, SMS, and more—offers powerful tools to boost your marketing efforts.

Phonexa offers a range of powerful features, including:

• Comprehensive insights into clicks, web leads, and phone call tracking
• Real-time campaign reporting and analytics
• A centralised dashboard consolidating key data from all your campaigns

“The consumer journey could start with a publisher running an offer on email and come all the way through to a call, with the same customer changing channels several times before they end up at the end destination. Around 45% of consumers don’t buy the first time, so how are you making sure that the attribution and remuneration you’re delivering through your marketing channels are feeding back to the right place? At Phonexa, we’re fairly agnostic – we partner with third-party services and platforms to help our clients work however they like. We’ve seen the best results when clients are using end-to-end tracking, and we’ve helped bring as much of that in-house as possible.” – David Pickard, CEO at Phonexa

 

Get Phonexa’s all-in-one performance marketing software suite at a single price (online price calculator):

Build your plan today, or take a product tour to discover how Phonexa can enhance your performance marketing efforts.

Frequently Asked Questions

What is the meaning of CPM in marketing?

CPM, short for cost per mille, indicates the cost of one thousand ad impressions (views) or occasionally the cost of sending one thousand emails that feature an advertiser’s promotional content. The CPM marketing approach emphasises building brand awareness rather than driving immediate leads or sales, aiming at the uppermost stage of the marketing funnel.

How do you calculate CPM?

CPM = (Total Cost of Ad Campaign/Number of Impressions) * 1,000

Typically, publishers or ad networks present their CPM rates upfront. For instance, if the CPM rate is £50, you pay £50 for every 1,000 ad impressions. You can reduce this rate by refining your audience targeting or negotiating terms with the publisher.

What qualifies as a good CPM?

The definition of a good CPM varies based on the ad placement and target audience. CPM rates typically range from £0.50 to about £3 for general audiences, while premium placements may cost over £15. In email marketing, CPM can climb to £50 or higher.