What CPM really measures
CPM measures the price of access to attention, not the outcome. A campaign can have a very low CPM and sell nothing: it has simply bought impressions that few advertisers compete for, often because they are worth little.
Conversely, a high CPM is not bad news in itself. A narrow, qualified audience is expensive to reach because several advertisers are targeting it. What matters is what that audience does next.
CPM therefore only makes sense as a series: compared with itself over time, within the same scope. Comparing the CPM of a broad awareness campaign with that of a narrow retargeting campaign compares nothing.
What a rising CPM signals
Competitive pressure. During peak sales periods, more advertisers bid on the same audiences. The increase is then seasonal and predictable.
Audience saturation. As frequency rises, the platform has to pay more to keep reaching people who have already seen the ad. A rising CPM together with climbing frequency points to an audience that is too narrow for the budget committed.
Creative fatigue. A creative that performs poorly gets more expensive delivery. The CPM increase is then the result of a content problem, not a market one.
A targeting change. Narrowing an audience inevitably drives CPM up. That is expected, and it is only a problem if downstream performance does not follow.
Telling these four causes apart is the real work: they produce the same symptom and call for opposite fixes.
Frequently asked questions
How do you calculate CPM?
Divide spend by the number of impressions, then multiply by one thousand. Spending €500 on 250,000 impressions gives a CPM of €2.
What is a good CPM?
No value serves as a reference: CPM depends on the platform, the format, the country, the season, and above all how narrow the targeting is. A CPM can only be interpreted against its own history, within a stable scope.
Why is my CPM going up?
Four main causes: seasonal competitive pressure, audience saturation (check it against frequency), creative fatigue, or narrower targeting. They produce the same symptom and call for different responses.
CPM or CPC: which should you watch?
They describe different stages: CPM is the cost of showing the ad, CPC the cost of each click it gets. A stable CPM with a rising CPC signals a falling click-through rate, and therefore a creative or relevance problem.