What is eCPM for publishers?

Definition and specifics

By design, eCPM allows publishers to see how profitable their websites are,

as it counts earnings from digital ads.

The abbreviation stands for “effective cost per thousand impressions,” and the key
word is “effective.” It helps website owners estimate how much they earn from every
1,000 ad impressions or how effective their monetization is.

It’s a critical metric in digital advertising. It focuses on earnings from ads, no

matter if they come from ad impressions, clicks, or conversions. Basically, it

considers all ad revenues and divides them between the total number of

impressions.

How about RPM? Is it a different metric?

You must have heard of the RPM metric, too. Regarding the publishers’

income, RPM (or “revenue per mille”) is a complete synonym to eCPM.

The RPM rate is also a publisher-side metric, allowing tracking and

improving regular earnings from display ads. But RPM is mainly used to

measure revenues per page. It helps understand how much a separate

website page with ads makes you money within a period. If you own a

multi-page website with segmented ads, this metric can be very useful.

RPM is not a fixed rate, and it will depend on multiple factors: page visits,
number of ad codes, ad viewability, user behavior (engagement, bounce

rates, and CTR particularly).

How to calculate eCPM [eCPM formula]

If you’re a webmaster or publisher, you will use this formula to calculate traffic

performance:

eCPM = (Total earnings from ads / Impressions)

*1000

The eCPM formula aims at estimating how effectively your traffic works. That’s

why it’s much more representative than any other rates, except for total

revenues. Planning your monetization strategy, you will need to choose those

ad networks that serve you this metric right in your stats reports.

eCPM examples
Learning how profitable your ads and traffic are within every 1,000

impressions is critical for your strategy. It reveals the best-performing formats,

helps relocate codes that don’t work well enough, and focus on the most

rewarding traffic. These two examples below will illustrate this point better

than words.

Example #1
You serve a Popunder ad on your blog, which has reached 100,000

impressions and made you $200.

The formula of your effective earnings will be:

($200 ÷ 100,000) × 1,000 = $2

This means you can estimate that you earn $2 per 1,000 impressions of

Popunder ads. Well done!

Example #2

Now, imagine you’ve added a Social Bar ad code to several pages. You’ve

served 50,000 impressions while getting $300.

The formula of your effective earnings will be:

($300 ÷ 50,000) × 1,000 = $6

Well, well, well… It seems like Social Bar has a higher eCPM in this case.

The examples above demonstrate that you cannot directly connect the volume

of your profits with the number of ad impressions. If, for instance, your website

visitors will make loads of conversions, your payouts for showing ads will be

higher.

Difference between CPM and eCPM

The difference between CPM and eCPM is not critical, yet important. The

latter one is revenue-oriented, hence more practical for publishers and

webmasters. The first one is mainly used by advertisers when they determine

how much they are going to pay for ad impressions.

Summing up, advertisers use the CPM metric to assess how much they

spend for 1,000 ad impressions. In the meantime, eCPM is more informative

for publishers who evaluate their revenues from every 1,000 impressions

they serve. If an advertiser makes, say, $200 profit with 100,000 impressions,

the effective cost per mille for a publisher will be $2.