# CPM vs CPC

> CPM is the cost of 1,000 views. CPC is the cost of one click. How they link through click-through rate, a worked example in rupees, and which to watch.
- **Author**: Marxx
- **Published**: 2026-11-05
- **Category**: Metrics
- **URL**: https://marxx.ai/library-compare/cpm-vs-cpc

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CPM is what 1,000 views of your ad cost. CPC is what one click costs. They are linked: CPC equals CPM / 1,000 / CTR (click-through rate, as a decimal, so 1% is 0.01). Watch CPM to see what the market charges you for attention. Watch CPC to see what that attention is worth. Neither one tells you if you make money.

## Side by side

| | CPM | CPC |
|---|---|---|
| Full name | Cost per 1,000 impressions | Cost per click |
| Formula | Spend / impressions x 1,000 | Spend / clicks |
| It tells you | What reach costs | What traffic costs |
| Pushed up by | Competition, small audiences, weak ads | Low click-through rate, high CPM |
| How you pay | Meta mostly charges by impression | Google Search bids are for clicks |
| Read it with | CTR | CPM and CTR |

Meta's help centre gives the CPM formula as [spend divided by impressions, times 1,000](https://www.facebook.com/business/help/753932008002620). Google Ads lets you bid on clicks with [maximum CPC](https://support.google.com/google-ads/answer/6326) and on impressions with viewable CPM (vCPM), per its [bidding guide](https://support.google.com/google-ads/answer/2472725). Checked 2026-10-20.

## A worked example

Say you spend INR 20,000 on each of two ads and track a 1% purchase rate on clicks. The numbers are made up.

| | Ad A | Ad B |
|---|---|---|
| Impressions | 2,00,000 | 1,00,000 |
| CPM | INR 100 | INR 200 |
| Link clicks | 2,000 | 2,500 |
| CTR | 1% | 2.5% |
| CPC | INR 10 | INR 8 |
| Purchases (1% of clicks) | 20 | 25 |
| Cost per purchase | INR 1,000 | INR 800 |

Ad B has double the CPM and still wins. Its creative makes more people click, so each click is cheaper. Check the link: Ad B's CPC is 200 / (0.025 x 1,000) = INR 8.

A low CPM does not make an ad good. Ad A bought cheap views that few people clicked.

## Which to watch

- **Reach and awareness goals:** CPM, with [frequency](/glossary/frequency).
- **Traffic goals:** CPC, with CTR.
- **Sales and leads:** cost per purchase or lead, then use CPM and CPC to explain why it moved.
- **Google Search:** CPC, since you bid per click. See [Meta ads vs Google ads](/compare/meta-ads-vs-google-ads).

To lower CPC, raise CTR with a stronger hook or lower CPM with a broader audience. See [what CPC is](/glossary/cpc) and [what CTR is](/glossary/ctr).

Plan reach with the free [CPM calculator](/cpm-calculator). Enter your spend and impressions, or your budget and a reach goal.

## Common mistakes

- Judging an ad by CPM alone. A cheap view that nobody clicks is a waste.
- Comparing CPC across two ads that count different clicks. Use the same click type for both.
- Reading one day's numbers. CPM can jump in sale weeks, so compare weeks, not days.
- Forgetting the landing page. A low CPC with a slow page still gives a high cost per purchase.

## FAQ

### Is CPM or CPC better to optimise for?

Neither. Optimise for the result you earn money from, such as purchases. Use CPM and CPC to diagnose why that cost moved.

### Why is my CPC high when my CPM is low?

Few people click the ad. Your CTR is low, so each click costs more. Test a new hook.

### On Meta, which clicks does CPC count?

[Clicks (all)](https://www.facebook.com/business/help/787506997938504) includes link clicks, Page profile clicks, reactions, comments and shares. Link clicks count only clicks to a destination. Use the link version for sales.

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