{"id":6083,"date":"2020-08-06T08:00:33","date_gmt":"2020-08-06T07:00:33","guid":{"rendered":"https:\/\/oko.uk\/?p=6083"},"modified":"2020-08-06T08:00:33","modified_gmt":"2020-08-06T07:00:33","slug":"ecpm-effective-cost-per-mille","status":"publish","type":"post","link":"https:\/\/cool.co\/supply-side-platform-home\/ecpm-effective-cost-per-mille\/","title":{"rendered":"OKO Deep Dives: What is eCPM?"},"content":{"rendered":"

In this deep dive, we’ll be taking a closer look at eCPM, or effective cost per mille, and help publishers understand its value, how to calculate it, how it differs from other metrics and how to optimize. Our series of OKO Deep Dives analyse key performance metrics and aim to strengthen publishers understanding which will enable them to optimize their monetization strategy.<\/p>\n

What is eCPM & why is it useful?<\/h2>\n

eCPM is the publisher\u2019s measure of what they are getting paid for the impressions that they serve. It stands for \u2018effective cost per mille\u2019 and represents the average revenue generated for every 1,000 impressions served. eCPM is used to measure the performance of inventory and of campaigns.<\/p>\n

eCPM Formula<\/h2>\n

To calculate eCPM, you need to know total ad revenue earnings and total impressions for a given piece of inventory or trafficking. eCPM<\/a> is calculated by dividing the total ad revenue by the total number of ad impressions and then multiplying the answer by 1000:
\neCPM = (Total Ad Revenue \/ Total Impressions) x 1000<\/strong><\/p>\n

\"eCPM<\/p>\n

Example:<\/strong>
\nA publisher has two ad units on a page, with one receiving a CPM of \u00a32 and the other \u00a30.50p. If 2000 ad impressions were sold for each ad unit, the publisher would earn \u00a35 in total, bringing the effective CPM of the impressions on that page to \u00a31.25.
\neCPM = (\u00a35 \/ 4000) x 1000 = \u00a31.25<\/p>\n

Although none of the advertisers actually paid \u00a31.25 per 1000 impressions, eCPM illustrates to the publisher the average value of 4000 impressions. Let\u2019s look at a different scenario:<\/p>\n

A publisher has 10,000 impressions to sell. Eight thousand impressions are sold at \u00a30.50p CPM which earns \u00a34 ad revenue (8000\/1000 = 8 x \u00a30.50p = \u00a34). One thousand are sold for \u00a32 CPM which equates to \u00a32 ad revenue (1000\/1000 = 1 x \u00a32 = \u00a32). The final one thousand impressions are not sold.<\/p>\n

In total, the publisher earned \u00a36 for 9,000 ad impressions. This equates to an eCPM and an average CPM of \u00a30.67p per 1000 ad impressions
\neCPM = (\u00a36 \/ 9000) x 1000 = \u00a30.67p<\/p>\n

As we can see, selling more impressions for a lower CPM has generated more revenue overall than the \u00a32 CPM for which only 1000 impressions were sold.<\/p>\n

Comparison to other Per Mille metrics<\/h2>\n

eCPM vs CPM<\/h3>\n

It\u2019s not unusual to see publishers using CPM where it would be more accurate to use eCPM. However, CPM is more accurately used to describe the cost to advertisers, which is usually not what the publisher receives.<\/p>\n

Example: An advertiser buys 1,000,000 impressions through an agency at a cost of $8,000. The CPM is $8. That agency offers a publisher $5,600 to service those impressions (retaining 30% revenue share). The eCPM to the publisher is $5.60<\/p>\n

eCPM vs Ad Request eCPM<\/h3>\n

Ad Request eCPM refers to the amount of revenue generated for each request made for a creative. Unlike eCPM, Ad Request eCPM takes into account the fill rate. Hence, ad networks with high CPMs but low fill rates are often disadvantaged. Ad Request eCPM can be calculated by dividing the total revenue by ad requests and multiplying the answer by 1000.<\/p>\n

eCPM vs Matched eCPM<\/h3>\n

Matched eCPM ignores the fill rate and calculates the revenue per one thousand matched requests. It can be calculated by dividing the total revenue by the number of matched requests and multiplying that figure by 1000. When the impact of fill rate is removed, the network CPM may be higher but the fill rate lower which can result in lower overall revenue.<\/p>\n

eCPM vs Ad eCPM<\/h3>\n

Ad eCPM calculates the total ad revenue per thousand ad impression by dividing the total ad revenue by the number of ad impressions and multiplying the answer by 1000. Ad eCPM ignores the impact of the number of ads that are served without generating impressions and revenue.<\/p>\n

eCPM vs Impression RPM<\/h3>\n

Impression RPM<\/a> is simply an alternative name to eCPM. Some platforms (including OKO and Google AdSense) lean towards using RPM (Revenue<\/strong> Per Mille) for metrics reporting on earnings, and CPM (Cost<\/strong> Per Mille) for those on costs in order to aid clarity.<\/p>\n

Impression RPM is calculated by dividing revenue by impressions and multiplying the answer by 1000.<\/p>\n

eCPM vs Page RPM or Session RPM<\/h3>\n

Page RPM<\/a> looks at the total revenue generated per page viewed on site whilst Session RPM calculates the amount of revenue earned per thousand visits to a website. Whilst Page RPM is dependent on eCPM, Session RPM focuses on earnings per visit.<\/p>\n

Where to find eCPM in AdSense<\/h2>\n

AdSense refers to eCPM as \u2018Impression RPM\u2019 and this can be found under performance reports.<\/p>\n

\"Finding<\/p>\n

Where to find eCPM in Google Ad Manager<\/h2>\n

Google Ad Manager<\/a> (GAM) offers publishers a number of eCPM metrics, including two that use the eCPM formula of Revenue\/Impressions*1000, depending on exactly which impressions you want to report on. These are:<\/p>\n