CPC and CPM are the two most common ways advertising is priced, and choosing between them shapes what you optimize for. They are not rivals so much as two views of the same funnel — but knowing which to watch, and when, changes how you buy.
What each one prices
CPM — cost per mille — is the cost of one thousand impressions: spend divided by impressions, times 1,000. You pay to be seen, whether or not anyone acts. CPC — cost per click — is the cost of a single click: spend divided by clicks. You pay only when someone responds.
So the fundamental difference is what you're buying. CPM buys exposure; CPC buys response. Under CPM the platform bears no risk if your ad is ignored — you still pay for the impressions. Under CPC the platform only earns when your ad works well enough to earn a click.
How they're connected
CPC and CPM are two ends of one chain, linked by click-through rate. Effective CPC equals CPM divided by 1,000, divided by CTR. That means a strong CTR converts cheap impressions into cheap clicks, and a weak CTR makes even cheap impressions expensive per click.
This is why you can't judge a CPM in isolation. A low CPM feeding a poor CTR can produce a worse cost per click than a higher CPM with compelling creative. You can move between the two views with the ad metrics calculator.
When to use CPC
CPC pricing suits response campaigns where a click is the point: driving traffic, leads, or sales. Because you pay only for clicks, it caps your downside if the creative underperforms, and it keeps the metric close to the outcome you care about. It's the natural default when the goal is action rather than awareness.
When to use CPM
CPM pricing suits reach and awareness campaigns where being seen by the right audience is the goal, and immediate clicks are not. It's also often cheaper per impression at scale, and it can be the better buy when your CTR is high enough that the effective cost per click beats what you'd pay under CPC directly. Brand campaigns and broad audience building are its home ground.
The takeaway
CPC and CPM price different things — response versus exposure — and they're joined by click-through rate. Match the model to the goal: CPC when a click is the objective, CPM when reach is. And whichever you buy on, read it through to cost per acquisition, which is where both chains actually end.