What is Cost Per Impression?
Cost Per Impression (CPI) measures how much you pay each time your advertisement is displayed to a viewer. It is one of the most fundamental metrics in digital advertising, allowing marketers to evaluate the efficiency of their ad spend and compare performance across campaigns and platforms.
The closely related metric CPM (Cost Per Mille) expresses the same concept per thousand impressions and is the industry standard for buying and selling ad inventory.
How to Calculate Cost Per Impression
The formula for cost per impression is:
[\text{CPI} = \frac{\text{Total Ad Spend}}{\text{Total Impressions}}]
To convert CPI to CPM (cost per thousand impressions):
[\text{CPM} = \text{CPI} \times 1{,}000]
Where:
- Total Ad Spend is the total amount spent on the advertising campaign in dollars
- Total Impressions is the total number of times the ad was displayed
Calculation Example
Suppose you spend $2,000 on a campaign that generates 5,000 impressions:
[\text{CPI} = \frac{2{,}000}{5{,}000} = 0.40]
[\text{CPM} = 0.40 \times 1{,}000 = 400]
The cost per impression is $0.40, and the CPM is $400.00.
Another Example
A social media campaign costs $750 and generates 150,000 impressions:
[\text{CPI} = \frac{750}{150{,}000} = 0.005]
[\text{CPM} = 0.005 \times 1{,}000 = 5.00]
The cost per impression is $0.005, and the CPM is $5.00.
Comparison Table
| Campaign | Ad Spend | Impressions | CPI | CPM |
|---|---|---|---|---|
| Display Ads | $2,000 | 5,000 | $0.4000 | $400.00 |
| Social Media | $750 | 150,000 | $0.0050 | $5.00 |
| Search Ads | $1,500 | 50,000 | $0.0300 | $30.00 |
| Video Pre-Roll | $3,000 | 200,000 | $0.0150 | $15.00 |
This comparison illustrates how CPI and CPM vary dramatically across channels. Social media and video campaigns often deliver far more impressions per dollar than display or search ads, though engagement quality may differ.
Why Track Cost Per Impression?
Monitoring CPI and CPM helps advertisers with several key activities:
- Budget allocation: Distribute ad spend across channels based on impression efficiency.
- Campaign comparison: Use CPM as a standardized metric to compare campaigns with different budgets and audiences.
- Negotiation: Benchmark your CPM rates against industry averages when negotiating with ad networks and publishers.
- Performance optimization: Identify underperforming campaigns and reallocate budget to channels delivering better value.
You might also like: Cost of Sales Calculator, Retained Earnings Calculator, or Retail Margin Calculator.