Key Takeaways:
- CPM (Cost Per Mille) means you pay for 1,000 ad impressions (views). It's best for **brand awareness**.
- CPC (Cost Per Click) means you pay only when someone clicks your ad. It's best for **performance marketing** (sales, leads).
- Choose your model based on your campaign goal: **CPM for reach**, **CPC for action**.
- Many strategies use both: CPM for top-of-funnel awareness and CPC for bottom-of-funnel conversions.
The Core Choice: Paying for Eyeballs or Actions?
When setting up a digital advertising campaign, one of the first and most fundamental decisions you'll make is choosing your pricing model. The two most common options are CPM and CPC. The right choice depends entirely on the primary goal of your campaign. Are you trying to get your brand name seen by as many people as possible, or are you trying to drive specific actions like website visits and sales?
What is CPM (Cost Per Mille)? Paying for Awareness
CPM stands for "Cost Per Mille," with "mille" being Latin for thousand. This is the price an advertiser pays for **1,000 views (or impressions)** of their advertisement. You pay for the exposure, regardless of whether anyone clicks on the ad. CPM is the ideal model for branding and awareness campaigns, where the main goal is simply to get your message, logo, and brand in front of a large audience.
Need to work with CPM numbers? Use our Simple CPM Calculator.
What is CPC (Cost Per Click)? Paying for Traffic
CPC stands for "Cost Per Click." With this model, you **only pay when a user actually clicks** on your ad. This is the cornerstone of performance marketing, where the goal is to drive traffic to your website, generate leads, or make direct sales. You're not paying for passive views; you're paying for active interest.
Working with CPC budgets? Check out our Simple CPC Calculator.
When to Use Each Model: A Quick Guide
| Use CPM When: | Use CPC When: |
|---|---|
| Your primary goal is brand awareness. | Your primary goal is direct sales or lead generation. |
| You have a visually appealing ad that communicates a message instantly. | You have a strong call-to-action (e.g., "Shop Now," "Learn More"). |
| You want to reach a broad audience for a new product launch. | You want to target high-intent users (e.g., people searching for your product). |
| Your budget is focused on reach and frequency. | Your budget is tied directly to performance and conversions. |
Conclusion: Align Your Model with Your Goal
There is no universally "better" model. The best choice is the one that aligns with your specific business objective. For building a brand, choose CPM. For driving sales, choose CPC. Many sophisticated marketing strategies use a combination of both: CPM campaigns to fill the top of the funnel with awareness, and CPC campaigns to convert that awareness into action at the bottom of the funnel.
