What is the difference between a CPM and an eCPM?

There are a couple of main differences between CPM and eCPM. While CPM is "cost per mille" and refers to the cost of ads per thousand impressions, eCPM is "effective cost per mille," which measures the ad revenue generated per thousand impressions.

There isn't a definitive answer as to what defines a good Effective Cost Per Mille. This will depend on a number of factors, including the industry, location of audiences, ad networks, and others.

What is eCPM Revenue?

eCPM is the specific revenue that an ad generates per 1,000 impressions. An impression involves ads appearing on a user's screen, which doesn't guarantee a view.

You can use eCPM to gauge ads' overall effectiveness based on the revenue they generate. You can then identify certain issues with ads or publishing platforms based on whether ads have a high or low eCPM.

The consensus varies regarding what good or high eCPM is, as it depends on many factors. However, some sources consider $4 to $10 to be the average eCPM.

How is eCPM Calculated?

The eCPM calculation is simple and involves a basic formula. Simply divide the total amount of ad revenue generated by the total number of ad impressions served, followed by multiplying by 1,000.

How Do You Increase eCPM?

You can increase your eCPM in different ways. For example, you can increase site traffic to increase impressions. You can also work on improving your viewability score, which would make your ads more visible to potential viewers.

Why is My eCPM so Low?

There are several potential reasons for a low eCPM. These could include users neglecting to interact with ads, users closing browsers before the ad loads due to slow loading speeds, or certain coding errors.

How Do I Lower My eCPM?

In most cases, you wouldn't want to decrease your eCPM, as a high eCPM indicates that an ad is profitable. However, you may want to decrease your CPM, or cost per thousand impressions, which would make ads more cost-effective. You can reduce CPM by taking steps such as targeting the right audiences and improving ad relevance.

Why is My eCPM Decreasing?

Your eCPM might decrease for multiple reasons. For example, low-quality advertisers may decrease click-through rates, ads might be using the wrong format, or buggy apps or websites could negatively impact user engagement.

Is High or Low eCPM Better?

Typically, a higher eCPM is better to have. A high eCPM indicates that an ad is profitable and generates revenue.

Why is My eCPM so High?

Various factors involved make for a higher eCPM. For example, apps such as music and utility apps with high engagement may have higher eCPM. The same goes for ad networks reaching audiences in certain regions such as the U.S. or the U.K.

Why is CPM so Expensive?

Many platforms increase CPM for ads with lower relevance. For instance, Facebook CPM will increase if your ad's relevance score is too low, meaning that Facebook won't show it to your target audience.

What are CTR and eCPM?

CTR is a metric that refers to "click-through rate," which is the rate at which users click through an ad. eCPM is "effective cost per mille," which is a metric measuring the ad revenue generated per 1,000 ad impressions.

What is eCPM in Google Ad Manager?

In Google Ad Manager, the eCPM is the average effective cost per thousand impressions that ads earn through ads published on the Google Ad Manager server.

What is eCPM? How to Calculate It?

Q: Why is eCPM Important?

eCPM can be crucial for optimizing ads and ad campaigns. For example, it can encourage publishers to develop tests to identify top-performing ads. Additionally, they can help predict future revenue.

‍What is eCPM?

eCPM (Effective Cost Per Mille) is a metric used in digital advertising to measure the performance of ad inventory. It represents the revenue earned for every 1,000 ad impressions displayed, regardless of the type of ad unit used (such as banners, videos, or native ads).

It specifically measures the revenue that ads generate on a website, which can help gauge the ads' cost-effectiveness and ROI. It's somewhat similar in concept to CPM, but there are some key differences between them that you should understand.

The following breakdown of eCPM or effective cost per mille and what it involves will give you a better idea of what this metric is and why it's important in many ad campaigns.

So, what does eCPM mean? The basic eCPM definition describes this metric as effective cost per mille, a publisher-side metric that indicates the revenue that an ad has generated per 1,000 impressions or mille. You may also refer to this metric as "cost per thousand impressions."

As this metric increases, so does the amount of revenue that an ad generates for publishers per thousand impressions, which are the times when an ad appears on a user's screen. Even if the user doesn't see the ad, this counts as an impression. If an ad has a high eCPM, it generally attracts more engagement compared to ads with lower eCPMs, leading to increased revenue.

Effective cost per mille is similar to revenue per mille (RPM), which publishers used to use in lieu of eCPM, which advertisers tended to use. However, more publishers today measure eCPM to connect with the advertisers they work with when publishing ads.

What is the difference between CPM and eCPM?

The main difference between CPM and eCPM is while cost per mille (CPM) measures the basic cost of advertising per thousand impressions, eCPM measures the revenue that ads generate per thousand impressions. The former functions as more of a payment model, while the latter serves as an indicator of an ad's profitability.

Why is eCPM important?

eCPM helps publishers determine whether ads that they publish are effective. If the ad has a high eCPM, the ads are converting viewers. Publishers can then use this information to optimize their payment model and make the most of their budgets.

Meanwhile, advertisers also benefit from eCPM, as they can determine whether their campaigns are effective based on this metric. Ad networks favor ads with high eCPMs, which means that advertisers running these ads could more efficiently generate a larger number of impressions. Ads with high eCPMs bring more value than those with lower eCPMs.

You can use eCPM to measure the overall effectiveness of ads, as the "effective" element of the acronym suggests. You can set a specific goal for your ads and measure this metric to gauge what kind of results your ads are getting. This metric can be used to figure out what kind of earnings you can anticipate in the future.

How do you calculate effective cost per mile (eCPM)?

You can calculate eCPM using the basic eCPM formula or an eCPM calculator. The formula involves dividing ad revenue by the total number of ad impressions, followed by multiplying this number by 1,000.

However, the majority of ad platforms, such as Google Ad Manager, instantly calculate this metric for you.

Calculation of eCPM

What is a good eCPM?

A good ad eCPM will differ from ad to ad or campaign to campaign. When determining what a good eCPM, you must consider the following factors:

Location — Depending on your geographical location and market, the eCPM could be higher, particularly in countries like the U.S. and in the U.K.
Site Speed — A website's loading speed will also influence the engagement rates for ads.
Ad Placement — If ads appear higher on a webpage in above-the-fold content, they'll generate more revenue and tend to have more impressions.
Advertising Channel — Native sponsorships and ads will see higher eCPM than display ads.
Seasonality — Depending on the industry, ads may see different levels of engagement at different times of the year, including specific holidays.
User Engagement — The website may also influence ad engagement, as websites with high engagement rates will lead to more repeat visitors, contributing to higher eCPMs

These and other factors can greatly influence this metric and what you might consider a good eCPM.

What is the average eCPM?

eCPM can vary greatly depending on certain factors. For instance, the average eCPM might be based on the location of the ad audience and the specific type of audience. Generally, the average eCPM tends to fall around $2 to $10.

What is eCPM floor?

The eCPM floor is essentially the eCPM minimum. It's the lowest Effective Cost Per Mille that publishers will allow for an ad before publishing it on their app or website. It's worth noting that eCPM floors only apply to traditional waterfalls and not in-app bidding. In-app bidding entails publishing ads for the highest bidder, while traditional waterfalls allow for the manual setting of eCPM floors for each line item.

Why do I have a low eCPM?

There are many potential reasons for a low eCPM and revenue. A couple of these could include low-quality ad networks that don't get the kinds of impressions you need or slow websites that don't generate engagement and, subsequently, impressions. You can use certain helpful tools to determine why your eCPM is low and optimize your ads or campaigns accordingly.

How you can increase eCPM?

You might wonder how to increase eCPM if you find that it's too low. You can take various steps to improve your eCPM, such as:

Improving monthly traffic
Using reliable software to land the best ad networks and ad placement
Decide on the ad format that engages users the most
Use different ad networks to boost fill rates
Test various types of ads to gauge performance, including banner and video ads
Optimize your viewability score, which will make your ads more visible to users

How to use eCPM in marketing strategies

Specifically, you can use eCPM to analyze revenue and optimize ad performance.

Ultimately, eCPM makes it easier for advertisers to identify top-performing ad formats, units, ad networks, and units. Based on eCPM and the value of ads, you can then make any necessary changes to your marketing strategies, whether you need to select different ad networks or make changes to the ads themselves. Over time, this will enable you to optimize your marketing campaigns.

Understand eCPM to get the results you want with ads

Knowing what eCPM or Effective Cost Per Mille is and how it works can help you as an advertiser or publisher. This metric will reveal the profitability of ads on any ad network, helping you optimize based on the ad's performance.

To find out how Storyly's app and web Stories can supplement ads in a holistic digital marketing strategy, discover our platform's capabilities today.

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