Is a Higher or Lower CPM Better?

Countless metrics lay along the road of direct response marketing. The better you understand them, the better you can understand your marketing goals and KPIs.

From the marketing intern all the way to the CMO, every member of your marketing team works together to maximize your budget’s impact. You only get so many ad dollars each year. And depending on your organization, making the most of those dollars determines whether your budget goes up next year—or down.

As you plan your campaigns, you’ll have a lot of opportunities to calculate your ad spending decisions. So today, we wanted to spend a little while discussing CPM.

Today’s question: Is a higher or lower CPM better?

It’s not quite as simple as you might think! Let’s start with a quick refresher on CPM basics before diving into the many factors to consider in the battle between higher and lower CPM.

CPM: The Basics

If you’re new to marketing, this section’s for you. If you’re not, then go ahead and skip ahead to the next one. (Or skim for a refresher.)

CPM refers to cost per mille, and it’s one of a number of pricing methods or metrics to pay for and interpret ad campaigns in digital advertising. It represents the cost that you, the advertiser, will pay for every one thousand impressions of your ad.

The calculation looks like this:

(Ad Spend / Impressions) * 1000 = CPM.

For every thousand impressions a campaign receives from the target audience, the cost of displaying that ad to you will be referred to as cost per mille, or CPM. CPM is used all over the digital space, from traditional banner ads or Google ads to Facebook, Twitter, and more.

Lower CPM vs. Higher CPM

For most people, a low CPM is what they’re looking for. And that usually comes from a cost savings perspective. If you can get 2000 people to see your add instead of 1000 for the same price, you’ll have reduced the CPM by half. It’s easy to take one look at that and crown lower CPM as the best.

But that’s not the whole story. And while cost savings is certainly a big draw for many, it’s not the only factor at play. Here are just a few of the factors at play:

  • Campaign goals
  • Industry
  • Platform or Publisher
  • Campaign budget

Let’s take each of these, one by one.

Campaign Goals

Your campaign goals—and overall business objectives—can give you a lot of insight into your CPM strategy. For example, a brand awareness campaign benefits from getting in front of as many eyeballs as possible. So a lower CPM makes sense! The more impressions you can get for your ad dollars, the greater the reach.

Once you reign in your ad focus to more targeted audiences and goals, higher CPM will start to take the lead. For example, if you’re looking for conversions through Facebook Ads, you’ll be paying for a greater reliability that your ad is being seen by the people you want—and who are likeliest—to click.


The industry your business is in plays a big impact on the price you’ll pay to run ads. CPM for the Beauty industry is different than in Education, Fitness, and Healthcare. And often, the heftier the price you would pay for these services, the higher the CPM.

In this case, lower vs. higher CPM isn’t the right frame to make relevant comparisons. An apparel brand will likely see much lower CPM regardless of channel than a home improvement brand. (Not to mention their CTR will probably be higher, too.) Cross-industry CPM comparison will lead you astray before you even get started.

Platform or Publisher

Not all digital or social ads are created equal. Higher quality sites with reliable, real audiences are certainly worth more to you in most cases than the sites you’ll find “off the beaten path.” And they’ll cost more, too.

Depending on your marketing goals, you may find the publishers with higher average CPMs carry an added benefit of authenticity. You know who is seeing your ad, because it’s the readers of XYZ Publication (Creative name, huh?). The further away you get from high quality publishers, the closer you get to spam and fishy figures. Is a low CPM really worth it if it means you’re only making an impression to a bot farm?

Is a Higher or Lower CPM Better?

If you can’t already tell by now, we’re about to give you a classic non-answer here. Because while everyone loves to stretch their marketing budget, certain goals and environments just call for a higher CPM. But we’ll never fault anyone for looking for a deal!

If there’s a takeaway here, it’s that you should always look beyond the numbers. That’s what the best direct response marketers do. Why? Well, that’s always where the best insights are hiding.

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