Definition
CPM (Cost Per Mille) is an advertising metric that measures the cost of 1,000 ad impressions. (“Mille” is Latin for thousand.)
Explanation
In dropshipping, CPM is widely used to evaluate the cost of getting ads seen by people on platforms like Meta Ads, TikTok Ads, and YouTube.
Unlike CPC or CPA, CPM focuses on visibility rather than clicks or purchases. It helps advertisers understand how expensive it is to reach an audience.
The basic formula is:
A high CPM usually means the audience is more competitive or expensive to target. Factors that can influence CPM include:
- Audience competition
- Ad quality and engagement
- Seasonal demand (e.g. Black Friday)
- Country or region being targeted
- Niche and product category
In dropshipping, CPM is especially important when testing creatives. Strong video ads often lower CPM because platforms reward engaging content with cheaper reach.
Example
A dropshipping store spends $120 on a Facebook ad campaign:
- The ads receive 15,000 impressions
The CPM is:
This means the store pays $8 for every 1,000 ad impressions.
Key Takeaway
CPM helps dropshipping businesses measure advertising reach and understand how efficiently their ads are being delivered to potential customers.