How it works
These are the three standard ways to price and compare digital advertising. CPM (cost per mille) is what you pay for 1,000 impressions, CPC is the cost of each click, and CPA is the cost of each conversion: a sale, signup or lead.
Pick the metric to solve for; the other inputs are optional and fill in the supporting results such as click-through rate and conversion rate.
CPM measures reach, CPC measures traffic, and CPA measures outcomes. A campaign with a low CPM can still have a poor CPA if few people click or convert, so judge campaigns on the metric tied to your goal.
Formula
CPM = Spend ÷ Impressions × 1,000. CPC = Spend ÷ Clicks. CPA = Spend ÷ Conversions. CTR = Clicks ÷ Impressions.
Questions people ask
What does the M in CPM stand for?
Mille, Latin for thousand. CPM is the cost per thousand ad impressions.
What is a good CPC?
It varies enormously by platform and industry. Search ads for competitive terms like legal or insurance can cost $50 or more per click, while many social and display campaigns cost under $1.
How is CPA different from customer acquisition cost (CAC)?
CPA usually measures one campaign or channel and can count any conversion. CAC is broader: all sales and marketing spend divided by new paying customers.