If you’re an advertiser or a publisher, you’ve probably heard of eCPM. eCPM, or effective cost per mille, is a popular metric used in digital advertising to measure the performance of your campaigns.

But what is eCPM, and how can you calculate it?

In this article, we’ll explain what eCPM is, why it’s important, and how you can calculate it for your advertising campaigns.

What is eCPM?

eCPM is a metric used in digital advertising that calculates the revenue generated per thousand impressions (mille is Latin for thousand). It’s calculated by dividing total earnings by the number of impressions, then multiplying the result by 1000. The formula for eCPM is:

eCPM = (Total Earnings / Impressions) * 1000

For example, if your ad campaign generated $50 in revenue from 10,000 impressions, your eCPM would be:

eCPM = ($50 / 10,000) * 1000 eCPM = $5

Why is eCPM important?

eCPM is important because it allows you to compare the performance of different ad campaigns, even if they have different pricing models. For example, one ad campaign may be based on cost per click (CPC), while another may be based on cost per thousand impressions (CPM). By calculating the eCPM for both campaigns, you can compare their performance on an equal basis.

eCPM is also useful for publishers because it allows them to optimize their ad inventory. By tracking the eCPM of different ads, publishers can identify which ads are generating the most revenue and adjust their inventory accordingly.

How to calculate eCPM

To calculate eCPM, you need to know the total earnings and the number of impressions generated by your ad campaign. If you’re using a third-party advertising platform, this information should be readily available in your dashboard.

Once you have the total earnings and impressions, you can use the eCPM formula to calculate the metric. Here’s a step-by-step guide:

Step 1: Calculate the total earnings

The total earnings are the amount of revenue generated by your ad campaign. This includes any revenue generated from clicks, impressions, or conversions.

Step 2: Calculate the number of impressions

The number of impressions is the number of times your ad was displayed to users. This includes any ad placements on websites, social media platforms, or mobile apps.

Step 3: Calculate the eCPM

To calculate the eCPM, divide the total earnings by the number of impressions, then multiply the result by 1000.

eCPM = (Total Earnings / Impressions) * 1000

For example, let’s say your ad campaign generated $100 in revenue from 50,000 impressions. To calculate the eCPM, you would use the following formula:

eCPM = ($100 / 50,000) * 1000 eCPM = $2

In this example, your eCPM is $2, which means you earned $2 for every thousand impressions generated by your ad campaign.

Conclusion

eCPM is a useful metric for measuring the performance of your advertising campaigns. By calculating the eCPM, you can compare the performance of different campaigns on an equal basis and optimize your ad inventory to generate more revenue. Use the formula above to calculate your eCPM and track the performance of your ad campaigns.

Nigel Quadros

As the Managing Director of Quadros Holdings, he brings extensive experience in the marketing industry and a passion for delivering end-to-end solutions. With a focus on client satisfaction and results-driven strategies, he leads a team that provides top-quality services to clients across the Middle East, India, and Europe.