What is eCPM? How to Calculate eCPM
eCPM, or effective cost per thousand impressions – estimates the revenue for each thousand ad impressions. eCPM is calculated as (Total Earnings / Impressions) x 1000. This metric assists app publishers in evaluating and optimizing their app monetization strategies by comparing ad revenue earned across many variables like the ad network, region, location, etc.
How do You Calculate eCPM?
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What is a good eCPM?
A decent eCPM will depend on a variety of variables. A metric is nothing more than a number without context, and this context is required to compare and assess its performance. Among these elements are:
- Ad format – Certain advertising formats are more expensive than ordinary display ads but are significantly more successful, resulting in higher conversion rates. Another element that can significantly influence pricing is ad placement, as some positions get compensated while others are not.
- Ad placement – Ad placement might have an impact on the total number of impressions. Ad units toward the top of the app page can earn more revenue.
- Location – Publishers working in top-tier markets typically have higher eCPM rates.
- User engagement – an app with engaged, devoted customers can demand higher fees, resulting in higher rates.
- Seasonality – some events might cause an increase or reduction in the number of impressions purchased by marketers. All of these holidays increase competition for space on most publishers’ platforms.
Marketers may effectively measure a strong eCPM rate and create realistic and objective objectives for their monetisation plan by cross-referencing factors mentioned above with historical year-over-year and month-over-month data.
CPM vs. eCPM
The fundamental distinction between CPM and eCPM is that CPM infers the advertisers spend per 1000 ad impressions, whereas eCPM represents the publisher’s average ad revenue per 1000 impressions.
CPM is a measure to aid with budget allocation and campaign optimisation used by marketers. eCPM, on the contrary, is the total revenue a publisher brings in for every 1,000 impressions, unlike CPM, which gets calculated given the total campaign cost and the number of impressions. eCPM is a dynamic computation influenced by supply and demand dynamics in AdTech.
What is the significance of eCPM? And what are the advantages of eCPM Optimization?
Regardless of channel, ad type, or pricing mechanism, the eCPM statistic can assist publishers in evaluating the efficacy of their monetization initiatives. Publishers may evaluate the effective revenue they earn from multiple ad units using eCPM data, even if their pricing scheme utilized is different.
Optimizing eCPMs effectively may:
- Assist publishers and advertisers in making data-driven decisions.
- Provide a method for measuring the efficacy of advertising initiatives.
- Provide a method for comparing revenue possibilities across various ad formats and pricing schemes.
- Help publishers optimize their inventory by finding the most profitable ad units; with this information, optimizing all other units can be straightforward.
What is the average eCPM?
On average, eCPMs range between $4 and $10. Nevertheless, the average eCPM for a publisher’s site may be determined by several factors. The average eCPM will be affected by the target audience, advertising market, ad position, and other variables. For additional info about eCPMs throughout the world!
When is the eCPM measure helpful to publishers?
eCPMs may be used:
- To evaluate site performance against averages when undertaking a direct-response campaign
- As a uniform metric for calculating revenue per impression sold.
- As a measure of campaign performance.
- Enables publishers to optimize in-app ad revenue better.
- With any other purchasing method, such as CPA, CPC, etc.
What have we discovered thus far?
- eCPM metric can help publishers effectively assess an app developer’s ad monetization performance or the ad revenue earned by a campaign.
- Knowing how eCPM gets computed will assist marketers in ensuring that they are using the most effective buying model.
- Marketers can effectively determine a good eCPM rate and establish realistic objectives for their campaign optimization efforts by integrating historical data with characteristics such as ad placement, geography, user interaction, seasonality, and ad type.