CPM (cost per mille, Latin for thousand) is the price of one thousand ad impressions, computed as (spend / impressions) × 1,000. The unit is dollars per thousand impressions delivered. Platforms that bill on outcomes (CPC, CPA, CPV) still compute and report CPM, because it is the underlying unit price of attention regardless of which buying model the campaign uses.
For a DTC operator, CPM is the input that most often explains ROAS swings unconnected to creative or audience. The arithmetic is direct: at constant click-through, conversion rate, and AOV, a doubling of CPM halves measured ROAS. When the funnel hasn’t changed and creative hasn’t changed, CPM movement is usually the residual that explains the gap on a finance review.
The way buyers usually think about CPM is as the joint product of three factors: the auction density on the targeted inventory, the audience scarcity premium, and the platform’s creative-quality discount applied via relevance, quality, or engagement scores. The first two are exogenous to the brand. The third is the only lever a buyer controls directly.
Two patterns recur. CPMs on retail-heavy platforms typically rise materially in November and December as advertiser demand concentrates around Black Friday and Cyber Monday, and that inflation compresses MER for the same brand running the same campaigns. And broad targeting often shows a lower CPM than tight custom audiences — not because broad is better, but because the auction has more inventory to clear bids against.