Understanding the eCPM metric, its calculation, and its importance for comparing performance across different monetization models and campaigns.
Effective Cost Per Mille (eCPM) is a performance metric that represents the effective revenue or cost generated for every 1,000 ad impressions. Unlike pricing models that define how an advertiser is charged, eCPM is a calculated value used to evaluate and compare performance across different campaigns and monetization models.
To calculate eCPM, you divide the total revenue generated by the total number of impressions, then multiply the result by 1,000.
eCPM = (Total Revenue ÷ Total Impressions) × 1,000
This calculation provides a standardized way to understand how much value is generated per thousand impressions.
eCPM allows publishers and advertisers to compare the performance of campaigns that use different pricing models, such as CPI, CPA, or CPM. By converting results into a common metric, eCPM makes it easier to identify which campaigns are delivering the highest value per impression.
This makes eCPM a powerful indicator of overall monetization and campaign efficiency.
Although CPM and eCPM share the same mathematical calculation, they serve different purposes:
A pricing model where advertisers pay based on the number of impressions delivered. CPM defines how a campaign is billed and serves as a contractual pricing agreement.
A performance metric that reflects how much revenue or value is generated per 1,000 impressions, regardless of the pricing model used. eCPM measures how well a campaign performs.
In short, CPM defines how a campaign is billed, while eCPM measures how well a campaign performs. They serve complementary but distinct purposes in campaign analysis.
eCPM does not indicate how a campaign is purchased. Instead, it acts as a signal of effectiveness. A higher eCPM generally means that impressions are generating more value, whether through installs, clicks, sales, or other actions.
Because of this, eCPM is often used to rank and prioritize campaigns.
Consider two campaigns: Tiger and Fox.
eCPM calculation:
($125 ÷ 5,000) × 1,000 = $25 eCPM
eCPM calculation:
($250 ÷ 10,000) × 1,000 = $25 eCPM
In campaigns that are billed on a CPM basis, the eCPM will always match the CPM value.
eCPM is commonly used to:
It provides a clear, unified view of performance across a wide range of campaign types.
eCPM (Effective Cost Per Mille) is a critical performance metric that measures the value generated per 1,000 impressions. By standardizing results across different pricing models, eCPM enables accurate performance comparisons and helps identify the most effective campaigns.
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