Ah, acronyms. Digital advertising is known for them, and digital advertisers are confused by them. You might know what CPM means, but what is eCPM and how is it different?
Go ahead and bookmark this glossary for easy reference.
Simply put: eCPM stands for effective cost per mille and can be calculated regardless of what buying method is being used.
You might be wondering if eCPM is any different from CPM, and they’re really just different sides of the same coin. First, don’t worry if this is the first time you’re hearing about it—this may just be because it mainly applies to app developers and publishers. Depending on the industry you work in, you may not need to add this line to your reports just yet.
The main difference between eCPM and CPM lies in the data you’re using to calculate it and when you’re calculating it. The term “CPM” only applies when you’re only calculating cost-per-thousand impressions and can be calculated at any time during a campaign, whereas eCPM paints a more revenue-centric picture and can be applied to any buying method such as cost-per-acquisition, cost-per-click, etc. and is calculated post-campaign.
How is eCPM calculated?
Marketers & advertisers: Keep in mind that your CPM rate and eCPM value are, by definition, identical. If you’re instead looking at calculating the eCPM for a campaign where cost-per-click (CPC) was the objective, here are the steps to take:
- After a campaign has ended, look up the total number of impressions served.
- Next, look up the total amount of clicks for that campaign.
- And finally, what was the cost-per-click?
This doesn’t just apply to CPC campaigns; the equation above applies to all other campaign goals and buying methods, such as CPA.
As briefly mentioned above, eCPM is most often applied on the app developer and publisher side, helping them to determine which type of ad inventory is earning more money on their app or website. This is also why, as a marketer, you probably don’t have to worry about any of this. Even if you’re not a publisher, though, it never hurts to get in the loop about supply-side metrics. (Hence, this post!) If you’re interested in learning more, ironSource has a stock market-esque eCPM tracker that helps app publishers stay on top of industry numbers.