CPM vs eCPM

CPM vs eCPM

A lot of publishers are getting confused between CPM and eCPM. Some think that they are the same but in reality, they are different. In this post, you’ll learn the difference between the two, how to calculate each and how they can be used to measure earnings.

CPM

Let’ start first with CPM. CPM stands for “Cost Per Mile” or cost per 1000 impressions. Advertisers set their desired price per 1000 ads served.

For example, the advertiser budget for a campaign is $20, and the ad receives 2000 impressions. To calculate CPM you take ($20/2000) * 1000 = $10 which means that the advertiser is willing to spend $10 for every thousand impressions.

CPM  = (Cost of the campaign/ Number of total impressions) * 1000

calculation 1

calculation 2

The CPM rate helps advertisers and companies to spread their products to a larger audience for an effective advertising cost.

It is also a great metric used by advertisers to measure the cost of the campaign, how much the publisher will get paid for every 1,000 impressions, and to evaluate the effectiveness of displaying ads.

CPM is traffic driven, the higher the traffic of the site the better the CPM.

eCPM

eCPM or “Effective Cost per thousand impressions” is used by publishers to determine the revenue generated from a thousand impressions of an ad campaign and to measure the performance of a publisher’s inventory being sold in various channels.

For example, if an ad campaign generated $100 revenue after receiving 10,000 impressions, the eCPM would be ($100/10,000) * 1000 = $1. This means that the publisher can earn $1 per 1000 impressions.

eCPM = (Estimated Earnings / Number of total impressions) * 1000

calculation 3

calculation 4

When is eCPM useful for publishers?

  • When running a direct response campaign
  • To compare site performance to averages
  • A universal standard of measurement regarding revenue for the impression sold.
  • Can be used as a critical indicator of the campaign’s performance.
  • Allows publishers to optimize their revenue better.
  • Can apply to any other buying method such as CPA, CPC, etc.

When is CPM useful for publishers?

  • Visitors don’t need to click on the ads for the publisher to earn ad revenue.
  • Can be placed anywhere on the site easily.
  • A publisher can determine the expected revenue per impressions.
  • There’s no concern regarding CTR.
  • Allows publishers to generate revenue based on traffic.
  • It’s served for a fixed price and can be a predictable revenue stream.

Conclusion

In Summary, CPM is the rate which the advertiser is willing to pay for a 1000 impressions and eCPM is the earning of the publisher per 1000 impressions.

We use CPM to increase visibility, advertise for relevant audiences, and drive high-performing campaigns. eCPM is very helpful for publishers to evaluate and optimize their monetization by monitoring ad revenue generated from campaigns.

It is important that publishers and advertisers know the difference so that they can accurately measure the revenue performance and the campaign costs for better forecasting. Are you ready to maximize your ad earnings? Sign up for a Starter account at MonetizeMore today!


FAQ

What is the difference between CPM and eCPM?

CPM is the rate that advertisers pay per 1000 impressions. eCPM is the ad revenue of a publisher per 1000 impressions. Find out more about CPM and eCPM in our blog post.

How do you calculate eCPM?

eCPM = (Estimated Earnings / Number of total impressions) * 1000

What is the difference between CPM and RPM?

CPM is the rate advertisers pay per 1000 impressions for ads. RPM is the ad revenue a publisher earns per 1000 impressions on their website. RPM can also be calculated on an ad, session, or page basis.

Kean Graham

CEO and Founder at MonetizeMore

Kean is the resident expert in Ad Optimization covering areas like AdSense Optimization, DFP Management, and third-party ad network partnerships. Kean believes in the supremacy of direct publisher deals and holistic optimization as keys to effective and consistent ad revenue increases.

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10 COMMENTS

  1. dsdsada

    Your eCPM calculation is wrong. Correct answer is not $1 but $10

    Reply
    • MonetizeMore

      Thanks for pointing that out for us! Article edited.

      Reply
  2. Thirunavukkarasu

    What is the standard ecpm for ad sense?

    Reply
    • MonetizeMore

      There is no standard; it depends on all manner of things such as site content, geography, user demographics etc.

      Reply
  3. emma lily

    please something explain what it CPM,

    Reply
    • MonetizeMore

      CPM stands for cost per mille. CPM is a measure of the rate paid/received per 1000 ad impressions; the formula is:

      CPM = Total Revenue / (Total impressions / 1000)

      Reply
  4. Faton

    Hi,

    I hope you’re doing well during these pandemic times!

    I wanted to make sure about earnings for 1000 impressions. Is it necessary to generate some clicks or even installs to get paid for 1000 impressions?

    Reply
    • MonetizeMore

      No, 1000 views at $1 CPM will earn you $1. Different ads will pay different rates for impressions and/or clicks.

      Reply
  5. FNG

    When Publishers retrieve data from their (1st party) Ad servers or SSPs, does the revenue generated from selling their advertising space on their site appear as ‘Media Cost’ or ‘Revenue’ ?

    Reply
    • MonetizeMore

      This sounds like publisher revenue.

      Reply

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