eCPM is like the cost per kilo of online advertising pricing. It is effectively what you would have paid for advertising if you were using a CPM model.
If you want to compare different ad pricing models, then you should work them back to an eCPM to see which one is best. By doing this you are working out what the best price you can get for 1,000 impressions is. (ie if you are running a CPC, CPA and CPM campaign altogether, you translate them all into their eCPM value and then you can see what is making you the most money).
What does eCPM mean?
It stands for effective Cost Per Thousand Impressions (with M being the Roman numeral for 1,000), or sometimes equivalent Cost Per Thousand (they are the same thing).
To work it out you need to know how many ad impressions have been used, as well as the total cost. For both, these are the total values used (see below).
The effective cost per thousand equation is basically the same as CPM:
eCPM = (Ad Spend x 1000) ÷ Ad impressions
The average CPM rate for 2015 is around $3 (about £2) – between £1 – £6 (approx. $1.50 to $10) is probably a reasonable range for display ads.
Some ad networks will try and reduce the number of impressions they say they have used. They do this by telling you their fill rate to inflate their eCPM. Don’t let them off the hook that easily!
If you give an ad network 1,000,000 impressions, even if they only filled 10% of them, use the full 1,000,000 to work out their effective CPM.
Similarly, for the amount of money you made, be sure to always calculate the money you are paying/receiving after any fees/commission have been taken by the ad platform. Otherwise, you are comparing apples with oranges.
7 Things To Know About eCPM
- If you are paying for different bits of advertising in different ways, use eCPM to directly compare costs.
- Don’t be confused when being paid for clicks, conversions, and video views at the same time. Translate how much everything costs into an eCPM so you can compare them directly.
- If you are being paid for different bits of advertising in different ways, use eCPM to directly compare who is paying the most.
- Don’t be confused when running CPA, CPV, CPC, & CPD campaigns at the same time. Translate how much everything costs into an eCPM so you can compare them directly.
- eCPM can be used as an acronym for Effective Cost Per Thousand, Equivalent Cost Per Thousand, Equal Cost Per Thousand, or even sometimes (foolishly) as Electronic Cost Per Thousand.
- The existence of eCPM implies that eCPC, eCPE, eCPA etc exist also, but no-one uses any of those other phrases.
- eCPM can be used interchangeably with CPM at this point. There used to be a reason to differentiate between the two, but that time has long past.
Other names for eCPM (synonyms)
effective Cost Per Thousand Impressions, equivalent Cost Per Thousand
It’s the opposite of (antonyms)
Not to be confused with