CPM in Marketing: Does It Make Sense to Pay or Get Paid for Impressions?

Overshadowed by popular pricing models like cost-per-lead, cost-per-mille (CPM) might not be the obvious choice when strategizing ad campaigns. CPM is quite risky because there’s no guarantee that ad views will convert into actual sales.

So why do companies run CPM campaigns with Google Ads, Meta Ads, or The Trade Desk? Aren’t they exposing themselves to unnecessary risks?

The CPM pricing model is great for affiliates, but what about advertisers?

It turns out that, albeit risky, CPM marketing – or the CPM pricing model – makes sense under certain conditions, like when you know exactly what ads to show, when, to what audience, and how to quantify your CPM campaigns.

Sounds a bit complex, does it?

via GIPHY

Let’s figure out CPM marketing together, starting from the basics and expanding into how and when you should use the CPM pricing model and when it’s better to stick to the good old cost-per-lead (CPL) or cost-per-sale (CPS).

Book a demo to learn how Phonexa can make your ad campaigns cost-effective through real-time marketing data collection and analytics.

What Is CPM in Digital Advertising?

CPM – cost per mille (thousand) – is typically the price of 1,000 views (impressions) displayed to the advertiser’s target audience by a platform like Google Ads or a partner affiliate (publisher). Sometimes, CPM is used in a broader context: for example, in email marketing, CPM means 1,000 emails sent or opened by the affiliate’s email subscribers.

How Does CPM Work?

The process and mechanics of CPM differ depending on whether you’re displaying ads using an auction-based platform like Google Ads or partnering directly with a publisher.

Option 1. CPM Campaign in Google Ads

To launch a CPM campaign in Google Ads, you should select an objective that supports CPM bidding and choose ad formats, placements, audiences, timing, and your CPM bid, which is how much you’re willing to pay for 1,000 impressions.

Next, Google Ads runs an auction to determine which ads should be shown based on the CPM bids and relevance. The winner’s ads are displayed on Google Display Network or YouTube to target users, with the winner being charged according to their CPM bid. For a single slot, there can only be one winner; however, if a webpage has several slots, different advertisers can win auctions.

CPM vs. vCPM in Google Ads

 

One significant adjustment you can make with Google Ads is to use the vCPM pricing model, paying for ads that meet the following criteria: at least 50% of the ad was displayed for at least 1 second for display ads and 2 seconds for video ads. In contrast, standard CPM campaigns charge you for every ad served, even if it’s loaded in a hidden or scrolled-past area.

Google Ads Types and 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, Maximize Conversions, Maximize 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 (are now transitioning to Performance Max ads)		CPC, CPA, Maximize Conversions
Smart Ads		CPC, CPA, Maximize Conversions
Local Services Ads	Google Guarantee	CPL
	Google Screened	CPL

Google Ads Pricing Models

Pricing Model	Total Count	Google Ads Types
CPM: Cost-Per-Mille	7	Single Image Display, Responsive Display, Skippable In-Stream, Non-Skippable In-Stream, Bumper, Masthead, Pause
vCPM: Viewable Cost-Per-Mille	7	Single Image Display, Responsive Display, Skippable In-Stream, Non-Skippable In-Stream, Bumper, Outstream, Pause
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, Smart
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, Smart
CPV: Cost-Per-View	3	Skippable In-Stream, In-Feed Video, Outstream
CPI: Cost-Per-Install	1	App Downloads
CLP: 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
Maximize Conversions	3	Performance Max, Local, Smart
Maximize Conversion Value	1	Performance Max

When running CPM campaigns through Google Ads or Meta Ads, you’re essentially renting ad space on publishers’ websites and apps, although indirectly. The biggest advantage of programmatic ads with platforms like Google Ads is that you can tap into any audience you want without having to search for publishers for every location you’d like to cover.

However, you can also partner with publishers directly, which can be effective if you target niche audiences and local markets. For example, display ads with micro- and nano-influencers can be much more cost-effective.

 

Option 2. CPM Marketing Campaign via a Direct Partnership with an Affiliate

Direct CPM marketing should be more cost-effective because you don’t have to pay a commission to the platform. The publisher’s commission with Google Ads is 32% for AdSense for Content and 49% for AdSense for Search.

Running a direct CPM marketing campaign boils down to selecting the right publisher and agreeing on the ad format, placement, and impression tracking. The best thing, though, is that you can cherry-pick websites and ad placements.

Speaking of the cost-effectiveness of direct CPM partnerships, the actual CPM is usually the middle ground between the affiliate’s ask and the advertiser’s bid. Naturally, advertisers want to lower their CPM rate, while affiliates are willing to get the highest price for the ad display.

Google Ads vs. Direct Affiliate Partnership

	Google Ads	Direct Partnership with an Affiliate
Cost	Custom CPM bid	Negotiated CPM
Commission	32% to 49%	0%
Targeting	Demographics, interests, and placements	Based on the publisher’s audience
Tracking	Automated via Google’s ad server	Manual via customer tracking platforms
Scale	Millions of websites	Publisher’s websites
Risk Mitigation	Precise targeting	Publisher choice and niche focus

Average CPM Rates Across Platforms

There are about a dozen factors that affect the actual CPM rate: the type of platform, industry, location, campaign objective, competition, and more. For example, Facebook’s CPM range can start at less than a dollar for less popular locations and reach dozens of dollars for popular locations and high-ticket industries.

Read also: The Definitive Guide to Facebook Affiliate Marketing in 2025

Top 5 Factors Affecting CPM

As a marketer, you want to lower your CPM while serving your ads to high-intent audiences – and you can do it by understanding the play of supply & demand, seasonality, location, and a few more factors in forming the ad display price.

Supply & Demand	Macroeconomic and microeconomic factors influence the demand and supply across markets, including digital goods and assets. In a crowded market, many advertisers can compete for the same ad placement, increasing the CPM.
Seasonality	For some campaigns, CPM can vary quite significantly over the year. For example, retail stores compete fiercely for traffic during holidays and sales seasons, doubling the CPM rate during Easter, Christmas, Black Friday, or Valentine’s Day. That said, you can reach a bigger audience and sell your products at a higher price if impressions eventually convert into sales.
Target Audience	Not only does the industry itself impact CPM rates, but also how granular your targeting is (unless you’re partnering directly with affiliates). By narrowing down locations, demographics, and behaviors, you also reduce the pool of eligible websites, making the CPM higher.The type of audience you’re targeting also matters. For example, targeting “all professionals” on LinkedIn might cost you two times less than targeting “C-level executives in tech, US-based” because many B2B advertisers compete for the latter group.
Campaign Goals	The CPM is generally lower for top-of-the-funnel goals and rises as you focus more on bottom-funnel targets.For instance, if you need to achieve top-of-the-funnel awareness, your principal goals are reach and brand awareness, neither of which requires precise targeting. On the other hand, targeting the bottom-of-the-funnel users means you have to narrow it down to the most granular demographic parameters, which is more expensive.
Ad Format	Dynamic and video ads attract more attention than static ads, so platforms charge more for these campaigns. On the other hand, the impact on brand awareness and sales might also be higher.

To increase the chances your ads are displayed without raising the bid, you should focus on the quality of your creative, targeting, and relevance.

Should Marketers Use CPM, Or Is It Too Risky?

Now that we’ve covered the CPM basics, let’s address a major practical question: Is CPM too risky compared to CPC, CPL, and CPA? And if it is, are there situations when you can be better off paying for impressions rather than leads, clicks, or specific actions like installs or downloads?

When it comes to making money with affiliate marketing, CPM is the riskiest for advertisers and the least risky for affiliates and affiliate networks. 

Truth be told, publishers may not even care whether ad displays convert into clicks, leads, or sales because they’ll get paid anyway. In contrast, advertisers have to pay for all ad displays, including those the user hasn’t noticed or paid attention to. The vCPM pricing model slightly reduces the risks, but you still get no guarantees.

Book a demo with our experts to explore how our Phonexa can help track impressions, generate leads, and take your lead acquisition to the next level.

The Disadvantages of CPM as a Pricing Model

No Guarantee of Engagement	An ad could be seen thousands of times without generating leads, calls, or sales. Even though you can track which CPM campaigns resulted in clicks and sales, you still pay for views, not leads or sales, like with the pay-per-lead (PPL) and pay-per-sale (PPS) campaigns.Likewise, you cannot measure the true ROI of the ads that haven’t led to engagement, even if they were seen by a user and impacted their purchase decisions later.
Need for Precise Targeting	Showing ads to relevant users is paramount when you pay for views, making accurate targeting the backbone of successful CPM campaigns. However, the more granular the targeting, the higher the CPM. On the other hand, PPL and PPS marketing often involves platforms or partners that pre-qualify leads or calls, so you don’t need upfront targeting.
Low Motivation for Publishers	Since the publisher’s revenue isn’t tied to performance metrics like click-through rates, lead quality, or sales, they may not be motivated enough to collaborate with the advertisers regarding optimal placement, design, etc.
Bad for High-Intent, Low-Volume Industries	CPM marketing focuses on the top of the sales funnel, so you shouldn’t expect a lot of clicks and conversions. The CPM pricing model isn’t very effective for high-intent, low-volume niches and bottom-of-the-funnel (BoFu) customers.
Fraud Risks	There’s not much you can do with fake impressions other than stopping the campaign altogether and switching the publisher. In contrast, the PPC and PPS pricing models suggest paying for tangible marketing outcomes – you either pay a fixed price per lead or commission on the sale – and therefore have a much lower risk (with PPS, there’s no risk at all).
High Entry Barrier	CPM requires testing like no other pricing model, and you need a good budget to get enough impressions for meaningful testing. In PPL and especially PPS, costs scale with results: the more sales you generate, the more commissions you pay, and it’s a win-win for you and your affiliate.
Low Impact on Short-Term Campaigns	A well-thought-out CPM campaign with a compelling creative may lay the foundation for long-term success by boosting your brand awareness and recognition, but it’s useless for short-term campaigns like holiday or seasonal sales, when consumers decide whether to buy or not on the spot.

How to Reduce Your CPM Rates

Define Your Target Audience	All popular CPM platforms allow targeting based on customer demographics, purchase histories, interests, and dozens of parameters you can use to display ads to relevant audiences while also controlling the campaign budget.
Optimize Ad Frequency	Narrowing the target audience is only one part of the equation – the other part is to find the right balance between displaying your ads to the right viewers while not frustrating them with frequent ads.
Monitor Engagement	Meta Ads, Google Ads, TikTok, and other popular advertising platforms offer detailed analytics on clicks, video views, likes, shares, comments, and more. Then you can double down on your most successful campaigns and eliminate underperforming ones.
Leverage A/B Testing	A/B testing can help determine which ad creatives, subject lines, images, CTAs, and headlines work and which do not. For instance, you can run two subject lines at the same time to see which performs better.

How Phonexa Can Turn Your CPM Campaigns Profitable

The good news is that you can mitigate, if not nullify, many CPM risks and disadvantages – especially those stemming from the lack of data – with Phonexa’s performance and affiliate marketing software suite. You’ll know who your leads are – demographics, psychographics, purchase history, etc. – what ads generated them, and many other customer journey details.

Here’s how you can link CPM campaigns to specific outcomes with LMS Sync:

1. Include Phonexa-specific tracking IDs in the ad’s URL when setting up CPM campaigns in Google Ads, Meta Ads, or directly with affiliates.
2. Create a landing page, embed Phonexa’s JavaScript tracking code there, and link the ad to the landing page.
3. In the LMS Sync dashboard, see whether the publisher’s impressions convert into leads

 

While LMS Sync was primarily designed to extract exhaustive web lead data, it will show you which publishers’ impressions convert into leads versus those with high impressions but no leads.

 

On top of LMS Sync, you can use HitMetrix to track post-impression engagement on the page where users land after clicking on your ad: scrolls, clicks, taps, as well as friction points like click-errors, bounces, speed-browsing, or mouseout. As part of the tech stack, you also get session replay software to recreate website journeys for additional tracking or evaluation.

 

Finally, you can predict how your future campaigns will perform with Phonexa’s predictive modeling software. AI-driven algorithms analyze historical patterns across campaigns to produce a data-driven forecast about how this or that campaign setting will play out.

Whether addressing an underperforming aspect of your CPM campaigns, targeting a new audience, or tapping into an untapped market, you can first simulate it in a safe environment without risks.

With predictive modeling, you can double down on winning campaigns and parameters instead of wasting time on losers. You know exactly where and when you should run your ad for the biggest impact, and if you don’t, just continue changing and toggling until you’ve got it.

 

Take a product tour to explore the synergy of Phonexa’s eight performance marketing solutions for CPM and lead acquisition campaigns.

CPM in Email Marketing

The CPM pricing model isn’t limited to ad campaigns but is also used in email marketing, reflecting the cost of sending 1,000 emails (less commonly, opened emails). The same principles apply: CPM email marketing is focused on brand awareness, with advertisers paying publishers or ad networks for including their promotional content in the newsletter.

In some cases, CPM may be used to describe the cost an advertiser or marketer pays to an email service provider (ESP) – Mailchimp, Constant Contact, SendGrid, etc. – for sending emails. But this is an operational cost of sending emails, not the cost of advertising.

How Phonexa Can Lower Your Email Marketing CPM

If you’re using LMS Sync or Call Logic with Phonexa, you must be getting a lot of insights into your lead generation campaigns, including which ads drive leads and how those leads behave when they land on your website and make a call.

But what about remarketing your leads with E-Delivery?

Not all leads can be sold on the first contact, so it’s crucial to have an effective follow-up strategy. By plugging E-Delivery into Phonexa’s software suite, you can nurture the leads that haven’t converted yet with the right emails or SMS messages sent at the right time.

 

Take Your Performance & Affiliate Marketing to the Next Level

Whether CPM is your pricing model or you’re relying on lower-risk PPL or PPS models, you can benefit immensely from Phonexa’s eight-in-one performance marketing software suite for email, social media, referral, affiliate, call, SMS, and other types of marketing.

Here are some of the features you get with Phonexa:

• Exhaustive insights into clicks, web leads, and phone calls
• Real-time reporting and analytics on all campaigns you’re running
• An all-encompassing dashboard where you can find all essential data across 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 the eight proprietary solutions at a single price (online price calculator):

Build your plan now, or take a product tour to learn how Phonexa can boost your entire performance marketing game.

Frequently Asked Questions

What does CPM mean in marketing?

CPM, or cost-per-mille, reflects the price of a thousand ad impressions (views) or sometimes the price of a thousand emails sent by the publisher who includes their advertiser’s promotional content. CPM marketing focuses on increasing brand awareness rather than generating leads or sales instantly, targeting the very top of the marketing funnel.

How is CPM calculated?

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

In practice, publishers or ad networks offer their CPM rates before the campaign. For example, if the CPM is $50, you’ll be charged $50 for every 1,000 displays of your ads. You can lower the CPM rate by adjusting targeting or negotiating with the publisher.

What is a good CPM?

Whether the CPM can be considered reasonable depends on where your ads are displayed and to whom they are displayed. The CPM might range from $.50 to around $3 for broad audiences and over $15 for premium placements. Email marketing CPM can reach $50 or even more.