eCPM measures the revenue generated for every 1,000 ad impressions displayed. It differs from CPM in that where CPM measures the cost an advertiser incurs for every 1,000 impressions, eCPM measures the revenue a publisher generates for the same number of impressions.
Publishers use eCPM as a means of enhancing ad placements, keeping an eye on ad monetization performance, and gauging the overall effectiveness of their ad monetization efforts.
It needs to be noted that eCPM only measures impressions, and not the number of times an ad was clicked. This latter metric is called click-through rate or CTR. A conversion happens once the user has transitioned down the funnel of impressions and clicks. The eCPM is thus, only the first point in this conversion funnel, and should be used in conjunction with other metrics to fully evaluate the success of an advertising campaign.
The formula for eCPM is as follows:
eCPM = (Total Ad Revenue / Total Impressions) x 1000
For example, let's say a publisher earned $500 from an ad campaign that received 100,000 impressions. To calculate the eCPM, we would use the following formula:
eCPM = ($500 / 100,000) x 1000
eCPM = $5
Therefore, the eCPM for this ad campaign is $5 per 1,000 impressions. This means that the advertiser earned an average of $5 for every 1,000 times the ad was displayed.
To calculate eCPM using an eCPM calculator, follow these steps:
What is considered a "good" eCPM can vary depending on multiple factors such as the type of ad, the platform being used, and the industry in which the publisher operates.
A publisher in the technology or finance niche may expect to see higher eCPMs compared to a publisher in the entertainment or lifestyle niche. Additionally, if a publisher receives traffic from Tier-1 countries such as the US and UK, advertisers are likely to pay more for that traffic.
That said, the average eCPM for most niches falls somewhere between $4-10. Anything within this range would be considered a good eCPM.
To increase their eCPM, publishers should look to increase monthly traffic, partner with multiple ad networks, work on their viewability score, A/B test different ad units, and experiment with different ad formats.
CPM refers to the cost an advertiser pays for 1,000 impressions on their ad unit. On the other hand, eCPM is a publisher-side metric that calculates the revenue a publisher generates for every 1,000 impressions on their ads.
eCPM is an important metric for publishers as it provides insight into the revenue generated by their ad inventory. This information helps them optimize their ad placements and pricing strategies to maximize their revenue.
The average eCPM varies depending on the industry, ad type, ad placement, and target audience. However, for most industries, $4-10 can be considered an average eCPM.
Several factors influence eCPM, including:
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Programmatic Advertising Jargon GlossaryNavigating ad tech’s acronyms, terminology and jargon can be a challenge. Here are a few definitions of common terms and metrics. You can also check out our extended Ad Tech Jargon Glossary.