What is eCPM?
eCPM is an advertising term that stands for Effective Cost per Mille (thousand impressions). It’s useful in cases where multiple advertising and pricing are used (CPC, CPA, etc.) as it converts everything to a common metric.
eCPM can also be used to forecast advertising spend and performance across different channels and pricing methods, and to determine the effectiveness of each channel through conversions and cost. An advertiser would typically calculate eCPM for each channel to deduct which offers the best performance at the lowest cost before starting the campaign.
Another common term for eCPM is RPM (Revenue per Mille). This term is typically used by publishers, and RPM for a website is typically constant and monitored over a period of 6 months. It’s important to increase your RPM periodically (every quarter) as that increases the value of your web property. Your target RPM is the RPM that advertisers should strive for.
eCPM is calculated by diving the total cost by impressions and multiplying them by 1000
(eCPM = (cost / impressions) x 1000)
RPM is calculated by dividing total revenue by total impression and multiplying them by 1000 (RPM = (total revenue/total impressions) x 1000).
