What is eCPM?

What is eCPM?

eCPM is one of the most important revenue metrics publishers need to track. In this post, we’ll help you avoid any confusion by taking a closer look at its meaning, how to calculate it, how to optimize it and answer other questions you may have.

eCPM meaning

This metric is a method of measuring an ad’s monetization performance based on the revenue earned per 1000 ad impressions and is an acronym for ‘effective cost per mille”. It is used on many platforms that monetize through display ads which can include desktop, mobile, in-app and video.

The higher the eCPM, the more money publishers are earning from their ad units. So what is eCPM and how do you calculate it?

It’s very simple:

eCPM = Total Ad Earnings / Impressions x 1000

How does this metric result in income?

This question gets typically asked by people who don’t understand what eCPM is in the first place. The previous sections should have cleared up some confusion. Here is a simple explanation to further demonstrate its use.

Let’s say you’re a publisher and your site is generating 100,000 impressions per day. You’re testing different revenue models and want to focus on monetizing via display ads.

You set up Google Ad Manager and place the ad units on your website. After a week’s time in your revenue dashboard, you calculate an eCPM of $4.

This means that you used the formula:

eCPM = Total Ad Earnings / Impressions x 1000

Then plug in your Total Ad Earnings ($400) and Impressions (100,000)

=($400 / 100,000) x 1000

eCPM = $4

So for the 100,000 impressions you generate per day advertisers are paying out $400 to you. So for every 1,000 impressions you generate, you earn $4. If your website traffic stays constant for the next 30 days at 100,000 impressions per day, you’ll make $12,000 in ad revenues at a $4 ad eCPM.

Here’s that broken down at a monthly basis for you:

eCPM = Total Ad Earnings / Impressions x 1000

Then plug in your Total Ad Earnings ($12,000) and Impressions (3,000,000)

= ($12,000 / 3,000,000) x 1000

eCPM = $4

How to increase eCPM?

Since eCPM can be used on so many platforms, each with a different set of users, rules, ad networks, and ad servers, there is no one size fits all solution.

To improve your eCPM means that you will need to optimize your ad monetization strategy, whether it’s for display advertising via desktop or through your mobile app.

Some options you can try include:

  • Joining ad networks that serve your specific geographical traffic region
  • Setting up multiple ad networks and increasing your fill rate
  • Setting up header bidding
  • Testing out different ad units
  • Optimizing ad layouts
  • The list is almost endless

Be sure to take a closer look at our blog post on ad optimization advice for new publishers.

However, implementing different methods and testing out new techniques takes a lot of know-how and time. The best solution would be to consult an ad optimization expert who can either assist you with your ad optimization tasks or point you in the right direction.

Be sure to contact MonetizeMore for a free consultation to find out how we can assist in maximizing your ad revenues.

Why is my eCPM so low?

Here our answer will be very similar to the section on increasing your ad revenues above. There can be many reasons for low eCPMs or poor ad earnings. This can include displaying ads from an ad network that does not correctly support your traffic geography or utilizing a poor ad network.

Or, not having enough advertiser competition for your traffic. Also, you might have a slow website, a bad ad layout or you’re not utilizing the correct ad units. It could even mean having some pages banned from your ad network and not displaying ads correctly.

What is a good eCPM on a publisher website?

eCPMs differ a lot depending on where the ad is placed (above the fold or below the fold), your traffic geography (tier one such US, UK tend to be higher), seasonality, site speed, user engagement, and even your niche.

In general for a publisher monetizing with display ads, one can expect an eCPM range of $4 – $10.

How to set an eCPM floor?

Be sure to read our blog post on how to set up price floors through Google Ad Exchange (now known as Google Ad Manager) here.

Conclusion

For further questions regarding eCPM or to find out how MonetizeMore can maximize your ad earnings, book your free consultation today.

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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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