CPC vs CPM — paying per click versus per thousand impressions. Formulas, when to use each, and how they relate.
In one line. CPC (cost per click) charges when someone clicks — best for direct response. CPM (cost per thousand impressions) charges for the ad being shown — best for awareness and reach. Pick the model that matches your goal.
| CPC | CPM | |
|---|---|---|
| You pay for | Each click | Every 1,000 impressions |
| Formula | Spend ÷ clicks | (Spend ÷ impressions) × 1,000 |
| Best for | Direct response, leads, sales | Awareness, reach, branding |
| Risk | Pay only for clicks | Pay even without clicks |
| Pairs with | CPL, ROAS | CTR, reach |
Cost per click means you pay only when someone clicks, aligning cost with action. It suits performance campaigns where a click is a step toward a lead or sale.
Cost per mille means you pay per thousand impressions regardless of clicks, which suits awareness goals where being seen by the right audience is the point.
They are linked through CTR: a CPM campaign with a high click-through rate produces a low effective CPC. Platforms often let you optimise either way — choose CPC when you want clicks, CPM when you want reach. Ultimately judge both by ROAS.
CPC charges per click (you pay for action); CPM charges per thousand impressions (you pay for visibility). CPC suits direct-response goals, CPM suits awareness and reach.
It depends on your click-through rate. A high-CTR CPM campaign can yield a lower effective cost per click than buying clicks directly. Compare the effective cost against your goal rather than the headline model.
Use CPM when your goal is awareness and reach — getting your brand in front of as many of the right people as possible — rather than driving immediate clicks or conversions.
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