AdProfitTools

Find calculators and guides.

Advertising metrics explained

CPM vs CPC vs CTR

Understand CPM, CPC, and CTR, how the formulas connect, and which AdProfitTools calculator to use for each advertising metric.

The short version

CPM

Cost per 1,000 impressions. Use it when you care about reach, display inventory, or media buying cost.

CPM = cost / impressions x 1000

CPC

Cost per click. Use it when traffic cost is the decision metric or when comparing paid channels.

CPC = cost / clicks

CTR

Click-through rate. Use it to understand how often impressions turn into clicks.

CTR = clicks / impressions x 100

Side-by-side comparison

Metric Formula Best for Watch out Calculator
CPM cost / impressions x 1,000 Reach, awareness, media buying cost Low CPM can still produce poor traffic. Open
CPC cost / clicks Traffic cost and paid channel comparison Cheap clicks can still be low quality. Open
CTR clicks / impressions x 100 Creative, relevance, and click-through behavior High CTR does not guarantee conversions. Open

How the formulas connect

CPM, CPC, and CTR are not isolated metrics. If you know the cost of impressions and the rate at which those impressions become clicks, you can estimate the implied cost per click.

CPC from CPM CPC = CPM / (CTR x 10)

Example: a $12 CPM with a 1.5% CTR implies an $0.80 CPC. That does not tell you profit yet, but it tells you whether impression-priced media is likely to compete with click-priced media.

Worked example

With $1,000 spend, 200,000 impressions, and 4,000 clicks, CPM is $5.00, CPC is $0.25, and CTR is 2.00%. The same example also proves the bridge formula: $5 CPM / (2 x 10) = $0.25 CPC.

Which calculator should you use?

  • Use the CPM calculator when the inputs are ad spend and impressions.
  • Use the CPC calculator when the inputs are ad spend and clicks, or when converting CPM plus CTR into CPC.
  • Use the CTR calculator when the inputs are clicks and impressions.
  • Use a ROAS calculator when campaign revenue is known.

Which metric should lead by campaign goal?

Awareness CPM Reach and impression cost usually matter before click data is mature.
Traffic CPC + CTR CTR explains click volume, while CPC shows what that traffic costs.
Conversion CPC + CVR/CPA Click cost only matters when paired with conversion rate or cost per acquisition.
Profit ROAS or break-even ROAS Revenue, margin, and costs decide whether traffic is worth scaling.

Common mistakes

  • Comparing CPM, CPC, and CTR across channels with different objectives.
  • Optimizing CTR without checking conversion rate or revenue.
  • Using CPM impressions and CPC clicks from mismatched reporting windows.

Sources and definitions

These formulas follow Google Ads metric definitions. Auction prices and acceptable performance still depend on campaign context.

FAQ

How are CPM, CPC, and CTR related?

CPC can be derived from CPM and CTR with the formula CPC = CPM / (CTR x 10), when CTR is entered as a percent.

Which metric should I use first?

Use CPM for reach cost, CTR for click rate, and CPC for click cost. Use ROAS when revenue is known.

Does a low CPM mean a campaign is good?

Not by itself. A low CPM can be useful, but CTR, CPC, conversion rate, and ROAS decide whether that reach is valuable.

Can CTR lower CPC?

When media is bought on a CPM basis, a higher CTR lowers implied CPC because more clicks come from the same impression cost.

What is a good CTR, CPC, or CPM?

There is no universal benchmark. Google notes that a good CTR is relative to what you advertise and the network. Compare the same objective, channel, format, audience, geography, and reporting period.