What is eCPM and How to Calculate It: Everything You should know

By Muskan On Oct 13, 2023

eCPM, or effective cost per mille, is a metric used to measure the profitability of online advertising campaigns. It is calculated by dividing the total revenue generated by an ad campaign by the number of impressions that the campaign received.eCPM is a valuable metric for both advertisers and publishers. For advertisers, eCPM helps to determine how much they should be willing to pay for online advertising space. For publishers, eCPM helps to determine how much money they can expect to earn from their online advertising campaigns.

How to calculate eCPM

To calculate eCPM, you will need to know the following:

• Total revenue generated by the ad campaign

• Number of impressions that the ad campaign received

• Once you have this information, you can use the following formula to calculate eCPM:

eCPM = Total revenue generated by the ad campaign / Number of impressions that the ad campaign received * 1000

For example, if an ad campaign generates $100 in revenue and receives 100,000 impressions, then the eCPM for the campaign would be $1.00.

How to improve your eCPM

There are a number of things that you can do to improve your eCPM:

• Target your ads carefully: The more relevant your ads are to your target audience, the more likely they are to click on them. This will lead to higher click-through rates (CTRs) and higher eCPMs.

• Use high-quality ad formats: High-quality ad formats, such as video ads and native ads, tend to have higher CTRs than traditional ad formats, such as banner ads. This will lead to higher eCPMs.

• Place your ads in high-traffic areas: The more people who see your ads, the more likely they are to click on them. This will lead to higher CTRs and higher eCPMs.

• Use an ad server: An ad server can help you to manage your ad campaigns more effectively and to optimize your eCPMs.

eCPM is a valuable metric for both advertisers and publishers. By understanding what eCPM is and how to calculate it, you can make better decisions about your online advertising campaigns.

Additional tips for improving your eCPM

Here are a few additional tips for improving your eCPM:

• Use a variety of ad formats: Don’t just rely on banner ads. Experiment with different ad formats, such as video ads, native ads, and social media ads, to see which ones perform best for your target audience.

• Test different ad placements: Don’t just place your ads in the same spots all the time. Experiment with different ad placements, such as above the fold, below the fold, and in the sidebar, to see which placements perform best for your target audience.

• Monitor your results: It’s important to track your eCPM and other metrics so that you can see what’s working and what’s not. This will help you to make necessary adjustments to your ad campaigns over time.