Glossary/CPC and CPM
What is CPC and CPM?
CPC is cost per click — the amount charged each time a shopper clicks your ad. CPM is cost per mille, the amount charged per thousand impressions, whether or not anyone clicks. Marketplace search ads on Shopee, Lazada, and TikTok Shop are predominantly CPC: you pay when the click happens, so the platform absorbs the risk of a poor click-through rate. Discovery, video, and display placements are more often CPM, which moves that risk to the seller. The two are connected by click-through rate, and converting between them is the first step in comparing any two placements honestly.
01/Formula
Formula
CPC = Ad spend / Clicks CPM = Ad spend / Impressions × 1,000 CPM = CPC × CTR × 1,000 CPC = CPM / (CTR × 1,000) Cost per order = CPC / conversion rate
Example
A Shopee keyword campaign: ฿8,000 spend, 4,000 clicks, 320,000 impressions. CPC = 8,000 / 4,000 = ฿2.00 CTR = 4,000 / 320,000 = 1.25% CPM = 2.00 × 0.0125 × 1,000 = ฿25.00 At a 3% conversion rate, cost per order = 2.00 / 0.03 = ฿66.67. On a ฿499 SKU keeping ฿120 contribution, that order clears — just.
02/In detail
How do CPC and CPM relate to each other?
Through click-through rate, and only through click-through rate. A CPM of ฿25 at a 1.25% CTR is a CPC of ฿2.00; the same CPM at a 0.5% CTR is a CPC of ฿5.00. This is why a seller cannot compare a CPM placement against a CPC placement without knowing the CTR each achieves, and why improving creative or listing quality lowers effective cost on a CPM buy but lowers volume risk rather than price on a CPC buy. The chain that actually matters runs one step further: CPC divided by conversion rate gives cost per order, and cost per order compared against unit contribution is the only comparison that decides whether the placement should exist.
Why does CPC rise over time?
Because marketplace ad inventory is auctioned and the number of sellers bidding for it grows faster than the number of shoppers. Retail-media spend across Southeast Asian marketplaces has been rising steadily, which is a structural bid-up of the same impression pool rather than a temporary market condition. The consequence for a seller is that a campaign left untouched gets less efficient without anyone doing anything wrong: last year’s CPC bought a click that this year’s CPC does not. A break-even ROAS calculated in January will be tight by December unless costs or prices moved to match.
Should you optimize for a lower CPC?
Usually not directly. CPC is trivially reducible by bidding on cheap, irrelevant terms, which lowers the price per click and raises the price per order. The quantity worth minimising is cost per acquired order relative to unit contribution, and a higher CPC on a high-intent term frequently produces a lower cost per order than a low CPC on a broad one. CPC is a diagnostic, not an objective: a sudden rise tells you competition or quality changed, and a suspiciously low CPC on a campaign with no orders tells you the traffic is worthless.
03/Why it matters
The trap, in one paragraph.
CPC is the input that converts an ad strategy into a cash cost, and it moves independently of everything a seller controls. A 25% CPC increase on a campaign at 20% contribution can be enough on its own to push it below break-even, with no change in conversion rate, price, or COGS. Sellers who track only ROAS see the symptom months after the cause, because ROAS blends the cost change with everything else that happened.
Common mistake
Treating CPM and CPC placements as directly comparable because both are “ad cost”. They price different things and carry the risk differently. Convert one into the other through CTR first, then convert both into cost per order, and only then compare — otherwise the cheaper-looking number is usually the more expensive buy.
04/In DataGlass
How CPC and CPM is used in DataGlass.
DataGlass reads ad-platform cost and delivery metrics alongside reconstructed order economics, so cost per click and cost per order can be read against the unit contribution of the SKUs the campaign actually sold rather than against a campaign-level revenue total.
05/Sources
- [1] Shopee Ads Thailand — Keyword Ads and CPC auction mechanics
Shopee documentation of keyword-ad bidding, cost-per-click charging, and budget controls.
- [2] Bain & Company — e-Conomy SEA 2025
Retail-media growth across Southeast Asian marketplaces — the demand-side pressure behind the structural rise in auction prices.
- [3] TikTok for Business — Help Centre, ad metrics
Definitions of impression, click, CPC, and CPM as reported in TikTok ad and Seller Centre reporting.
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