# What Are CPM, CPC and CTR? (And What's a Good Number?)

Source: https://www.mangogrow.com/blog/growth-strategy/cpm-cpc-ctr-explained
Publisher: MangoGrow (https://www.mangogrow.com)
Topic: Growth Strategy
Published: 2026-10-22 · Updated: 2026-10-22

## Key takeaways

- CPM is cost per thousand impressions, CPC is cost per click and CTR is click-through rate (clicks divided by impressions).
- They're linked: CPC = CPM ÷ (CTR × 1,000), so a higher CTR lowers your cost per click at the same CPM.
- LocaliQ's 2026 benchmarks put Google search ads at an average 6.64% CTR and $5.42 CPC, and Facebook lead campaigns at a 2.70% CTR and $1.80 CPC.
- Benchmarks vary hugely by industry, platform and campaign type, so compare against your own past results first.
- None of these is the goal: cost per lead, cost per customer and return on ad spend tell you whether ads are working.

**Short answer:** **CPM** is what you pay for **1,000 impressions**, **CPC** is what you pay **per click**, and **CTR** is the **percentage of people who click** after seeing your ad. They're linked: **CPC = CPM ÷ (CTR × 1,000)**, so a better CTR lowers your cost per click. As a reference, LocaliQ's 2026 benchmarks show Google search ads averaging a **6.64% CTR** and **$5.42 CPC**, and Facebook lead campaigns a **2.70% CTR** and **$1.80 CPC**. But these aren't the goal: **cost per customer** and **return on ad spend** are.

This guide is part of our [digital marketing agency cost](https://www.mangogrow.com/blog/growth-strategy/digital-marketing-agency-cost) series. For help reading your ad reports, see our [full-service growth service](https://www.mangogrow.com/services/full-service-growth).

## What is CPM?

**CPM (cost per mille) is how much you pay for every 1,000 times your ad is shown.**

**CPM = spend ÷ impressions × 1,000**

Example: $100 spend and 25,000 impressions = $4 CPM.

CPM tells you how expensive it is to reach people. It rises with competition (for example, the holiday season), narrow audiences and lower ad quality. See [CPM](https://www.mangogrow.com/glossary/cpm).

## What is CPC?

**CPC (cost per click) is how much you pay, on average, for each click.**

**CPC = spend ÷ clicks**

Example: $100 spend and 50 clicks = $2 CPC.

On Google search ads, you usually pay per click, and CPC depends on competition for the keyword and your ad's quality. See [CPC](https://www.mangogrow.com/glossary/cpc) and Google Ads Quality Score.

## What is CTR?

**CTR (click-through rate) is the percentage of people who click after seeing your ad.**

**CTR = clicks ÷ impressions × 100**

Example: 50 clicks from 2,500 impressions = 2% CTR.

CTR shows how relevant and appealing your ad is to the people seeing it. See [CTR](https://www.mangogrow.com/glossary/ctr).

## How do CPM, CPC and CTR fit together?

**A higher CTR means each click costs less, even if CPM stays the same.**

| CPM | CTR | Resulting CPC |
| --- | --- | --- |
| $10 | 0.5% | $2.00 |
| $10 | 1% | $1.00 |
| $10 | 2% | $0.50 |

That's why better creative and targeting (higher CTR) often lowers costs more than haggling over bids.

## What's a good CPM, CPC and CTR?

**Compare against your own history and similar campaigns first; industry averages are only a rough guide.**

LocaliQ's 2026 benchmarks (US campaigns):

| Platform and campaign | Average CTR | Average CPC |
| --- | --- | --- |
| Google search ads (all industries) | 6.64% | $5.42 |
| Facebook traffic campaigns | 1.93% | $0.60 |
| Facebook lead campaigns | 2.70% | $1.80 |

Industry differences are large: LocaliQ found legal search clicks averaging close to $10, while restaurants and arts and entertainment were around $2. CPM benchmarks vary even more by audience, country and season, so track your own.

## CPM vs CPC: which should I pay for?

**Choose by goal: CPM for reach, CPC for traffic, and conversion bidding for leads and sales.**

- **Awareness or reach:** CPM bidding lets the platform show your ad to as many relevant people as possible
- **Website traffic:** CPC or clicks optimisation
- **Leads or sales:** conversion-based bidding (for example Maximize conversions on Google, or optimising for leads or purchases on Meta), even if you're charged per impression or click

## Which numbers actually matter?

**Cost per lead, cost per customer and return on ad spend tell you whether ads are working; CPM, CPC and CTR help you diagnose why.**

| Metric | What it tells you |
| --- | --- |
| CPM | How expensive it is to reach people |
| CTR | How compelling the ad is |
| CPC | How much each visit costs |
| Conversion rate | How well the landing page and offer work |
| Cost per lead or customer | Whether the campaign is efficient |
| ROAS | Whether ad spend returns profit |

See what is a good ROAS and [customer acquisition cost](https://www.mangogrow.com/blog/growth-strategy/customer-acquisition-cost).

## How do I improve these numbers?

- **Raise CTR:** write ads that match the search or audience closely, use strong hooks and clear offers
- **Lower CPC:** improve ad relevance and landing pages (Quality Score on Google), add negative keywords
- **Lower CPM:** broaden audiences, refresh creative, avoid overly narrow targeting, plan around peak seasons
- **Improve conversion rate:** faster, clearer landing pages with proof and an easy next step

## A worked example

A dental clinic sees a Facebook CPM of $14 and a CTR of 0.7%, making clicks cost $2. It replaces stock-image ads with short videos of the team explaining treatments and adds a clear offer. CTR rises to 1.4%, CPC falls to about $1, and cost per booked consultation drops even though CPM stays similar. (Illustrative.)

## Common mistakes

- Judging campaigns on CTR alone (a cheap click that never converts is expensive)
- Comparing your numbers with averages from different industries or platforms
- Optimising for the cheapest CPM and reaching the wrong people
- Ignoring the landing page

## The bottom line

CPM measures reach cost, CPC measures click cost and CTR measures ad appeal, and they're linked. Use them to diagnose campaigns, compare against your own history, and judge success on cost per customer and return on ad spend.

Want your ad reports explained and improved? Request a [free growth audit](https://www.mangogrow.com/free-audit).

## Frequently asked questions

### What is CPM in advertising?

CPM means cost per mille, or cost per thousand impressions. If you spend $50 and your ad is shown 10,000 times, your CPM is $5.

### What is a good CTR?

It depends on the platform and campaign. LocaliQ's 2026 benchmarks show an average 6.64% CTR for Google search ads and around 1.9% to 2.7% for Facebook traffic and lead campaigns. Beat your own past results first.

### What is a good CPC?

A good CPC is one that leads to customers at a profitable cost. As a reference, LocaliQ's 2026 average Google search CPC is $5.42, while Facebook traffic campaigns average $0.60 and lead campaigns $1.80.

### Is CPM or CPC better?

Neither is better in general. CPM bidding suits awareness and reach goals; CPC suits traffic goals. For leads and sales, conversion-based bidding usually works best.

### Why is my CPM so high?

Common reasons are narrow or competitive audiences, seasonal competition (such as November and December), low ad quality or engagement, and restrictive placements.

## Sources

- [Search Advertising Benchmarks for Every Industry (2026), LocaliQ](https://localiq.com/blog/search-advertising-benchmarks/)
- [Facebook Advertising Benchmarks for 2026, LocaliQ](https://localiq.com/blog/facebook-advertising-benchmarks/)
- [About Quality Score, Google Ads Help](https://support.google.com/google-ads/answer/6167118)