Glossary comparison

CPC vs CPM

CPC (cost per click) and CPM (cost per mille, or cost per thousand impressions) are two ways of pricing ads. With CPC you pay only when someone clicks. With CPM you pay for every 1,000 times the ad is shown, whether or not anyone clicks, so it suits awareness rather than traffic.

Reviewed by Gareth Hoyle, Managing Director
Last reviewed 31 October 2026

CPC and CPM compared

	CPC	CPM
What you pay for	Each click on the ad	Every 1,000 impressions
Formula	Cost divided by clicks	Cost divided by impressions, times 1,000
Who carries the risk	Platform, if few people click	Advertiser, if few people click
Best for	Traffic, leads and sales	Reach, awareness and frequency
Common in	Search, Shopping and performance display	Display, video, social and programmatic
In Google Ads	CPC bidding on Search and Display	Viewable CPM (vCPM) bidding on Display
Metrics to watch	Click-through rate and conversion rate	Reach, frequency and viewability

How to compare CPC and CPM

The two are linked by click-through rate. Effective CPM equals CPC multiplied by CTR multiplied by 1,000, and effective CPC equals CPM divided by the number of clicks per 1,000 impressions. Converting both to the same unit, and then to cost per acquisition, is the only fair way to compare campaigns priced differently.

Google Ads mostly sells impression-based display inventory as viewable CPM. A display impression counts as viewable when at least 50% of the ad is on screen for one second or longer, or two seconds for video, so you do not pay for ads nobody could see.

When to use each and how they work together

Choose CPC when the job is to get people to a website and the click is a fair signal of intent. Choose CPM when the job is to put a brand or offer in front of a defined audience, and judge it on reach, frequency and later lifts in branded search or direct traffic rather than on clicks.

Many accounts run both: CPM-priced awareness activity to build demand, and CPC-priced search and remarketing to capture it. Ad platforms usually report both figures whatever the bidding model, which makes it easy to check the effective rate of each.

Example

A display campaign bought at a £4 CPM with a 0.2% click-through rate gets 2 clicks per 1,000 impressions, an effective CPC of £2. A search campaign at £1.50 per click looks only slightly cheaper, but if search clicks convert at 5% and display clicks at 2%, search costs £30 per sale against £100 for display.