Have you been wondering “what is eCPM?” Here’s everything you need to know – from how to calculate eCPM and how to increase it. Read on to know more.
If you are familiar with CPM (cost per mile), you may have also heard of eCPM and wondered about the difference. What is eCPM?
eCPM is a metric that is crucial for understanding the performance of your advertising campaigns and identifying opportunities to increase revenue.
Whether you’re a digital marketer, advertiser, or publisher, understanding eCPM is essential to maximizing your return on investment.
However, before diving into Effective CPM, let’s review the basics of CPM. So buckle up, and let’s get started with understanding, calculating, and increasing your eCPM.
What is eCPM?
To understand CPM, you must under what CPM is. So, let’s dig deep.
CPM, or Cost Per Thousand Impressions, is the amount advertisers are willing to pay for every one thousand impressions they receive. It’s an advertisers’ side metric that helps them decide the budget of their campaigns.
CPM is calculated using this formula:
For example, if an advertiser has a budget of $100 and wants to reach 100,000 users, then his/her CPM would be $1 CPM, i.e. ($100/100,000)*1000.
Let’s now take a look at what is eCPM.
eCPM full form is effective cost per mile. It is the revenue earned by a publisher for every one thousand impressions. You need to pay special attention to the term ‘effective’. Here, effective CPM means the revenue earned by the publishers effectively.
eCPM is cumulative revenue generated by publishers per thousand impressions, some of which also get clicked and converted into leads and customers for the advertisers. Hence, eCPM is not just calculated using CPM campaigns but also CPC, CPL, and other such campaigns running via the publisher’s inventory.
It is predicted by the ad network of the publisher using this eCPM formula:
How to Calculate eCPM? [eCPM formula]
We hope by now you have a clear understanding of what eCPM is and how it’s calculated. Now that you know what’s eCPM full form, and how it’s calculated, let’s take at how it differs from CPM and RPM.
Also Read – Understanding CPC vs CPM for Ad Publishers | AdPushup
IV. CPM vs. eCPM vs. RPM
eCPM sounds a lot like RPM (revenue per thousand pageviews).
Yes, on a broad level, eCPM and RPM do sound a lot alike. This is because both are publisher-side metrics and help predict ad revenue.
However, RPM refers to pageview-level earnings. Meaning RPM tells publishers about the revenue they should expect per thousand impressions per page. This depends on the number of page views, number of ad units, fill rate, and viewability score of these ad units, among other factors.
Google AdSense used to predict publishers’ earnings using eCPM in their previous models. However, newer AdSense versions show RPM instead of eCPM.
However, if you use Google Ad Manager, you will see eCPM in most of your reports and no mention of RPM or page RPM.
Meaning eCPM and RPM refer to the same thing, according to Google. However, if you are partnered with different ad networks, it’s better to clarify with them the metrics they use to predict your earnings.
Simply put, CPM is the money advertisers spend on a campaign. And eCPM is the estimated revenue generated per thousand impressions, and RPM is the amount earned by publishers per thousand pageviews.
Why Is eCPM Important for Publishers?
eCPM helps predict the earnings of the publishers. A target earning number can work as a motivation for publishers to work accordingly. If you are performing ad testing to find the best-performing ads for your website, then eCPM achieved for different ad tests can help you choose the winner.
However, you should always keep in mind that eCPM is a prediction, and the actual earnings can vary. Also, don’t get confused between eCPM and RPM, both mean (almost) the same. Hence, whether you work on increasing RPM or eCPM, your ultimate goal remains the same, maximize ad revenue.
How to Increase eCPM?
eCPM can be tricky to work around, as there is no guarantee that you will earn the amount predicted by your eCPM calculation. However, as a publisher, you can certainly work on increasing the performance of your inventory. Here are factors that affect your earnings:
Increase Monthly Traffic
Your monthly traffic is directly proportional to your earnings. This is the reason monthly traffic is the first thing asked by ad networks and advertisers when they look for publishers. Similarly, in order to maximize the earnings, start with increasing your website the traffic. You can go for organic, paid, or both methods of getting traffic, depending on your budget.
Partner with Multiple Ad Networks
Ad networks help you generate demand for your inventory. Partner with multiple ad networks for better demand and value for your inventory. Do your research to find ad networks offering better deals for different geographical locations. Adding multiple networks can get your inventory to high-paying advertisers. Also, it can increase the competition on your inventory and hence your earnings.
Looking for more demand on your inventory, we can help with our partnerships with 20+ global demand partners. Learn more.
Work on Your Viewability Score
Your ads are no good if users are not seeing them. Viewability has become an important factor for advertisers now to purchase inventory. This is why we advise publishers to work on their viewability score and combat banner blindness.
You can start by learning about viewability guidelines set by IAB, MRC, and Google. Simultaneously, you can start learning about viewable CPM (vCPM) – cost per thousand viewable impressions, where advertisers pay according to the impressions that are viewed, not the creatives that are rendered on the publisher’s site.
Try Active View Ad Refresh
Ad refresh can help publishers increase eCPM per session. Basically, the ad units refresh themselves after certain triggers, such as user action (click, hover) and time (after 60 seconds).
In theory, this allows publishers to inflate their inventory size. However, there are certain best practices that should be considered while implementing ad refresh to improve eCPM. For example, try active view ad refresh, this will only refresh the ad when the user is active on the screen with the ad unit – putting the advertiser’s dollar to good use and at the same time, helping publishers with their revenue.
Use Different Ad Formats
When it comes to ad format, go with what your users like. For that, you need to ace your testing game. Publishers have multiple ad formats available to run tests and find the best ones. Here are some commonly-used ad formats:
Banner Ads
Simple images with text in rectangle or square shapes (like 250×250, 720×90, 300×250, and more). Because of their simplicity and effective results, banner ads are the go-to solution for many publishers and advertisers.
Rich Media Ads
These are heavy, graphic, and media-rich ads that are interactive and appealing to users. These creatives are generally preferred for reducing banner blindness. However, rich media ads are heavy in file size as they are in gif or video formats.
Video Ads
Video ads get the users’ attention in the first few seconds and can result in better engagement compared to other formats. Hence, video ads are worth trying. Especially for video publishers, video ads are a must-try format.
Native Ads
These ads blend with the content of the webpage without disrupting the user experience. Native ads look like the organic content of the page and are proven to be beneficial for publishers with engaged, content-consuming users.
It is advisable to experiment with the combination of these ad formats to see better results.
Moreover, you can also read Google’s guidelines for appropriately placing ads on your web pages.
Work on User Experience
The user experience of your website can be a decisive factor in the success or failure of your efforts to boost eCPM.
A user who lands on your webpage but gets overwhelmed with ads is going to leave. This is a sign of a bad user experience. Such practices lead to the use of ad blockers amongst users, further reducing your eCPM. In fact, most ad networks, including AdSense, block publishers’ accounts for poor user experience.
Since the performance or page loading speed of your efforts will be slow, as a result, users will not be able to engage with your website.
Make sure the performance of your website is fast enough to cater to the users’ needs in a timely fashion. It’s because it will help you increase ad impressions and clicks, leading to a higher eCPM.
Also read – Increasing Ad Revenue through User Experience Optimization
Get Search Engine Traffic
With good SEO practices, you get users landing your website. Most of these are high-intent users and can provide quality impressions. Quality impressions benefit advertisers with their campaigns, and publishers by increasing their eCPM.
Make Your Website Mobile-Friendly
Mobile users have surpassed the total desktop users. Hence, this is the right time to start driving traffic from mobile users as well. For that, you need to work on making your site mobile-friendly; starting with AMP or PWA can be good options. Next, you can try mobile ad formats and sizes to make the most out of mobile ads.
Know The Value of Your Niche
The ad industry has seen advertisers pay more for a niche audience. Some niches are more valuable than others. Check whether you fall under the category of expensive keywords. If yes, you are in luck and can make a good ad revenue out of the market.
Determine the Source of Your Traffic
The content and niche of your site can be exactly the same as another site. However, there can be a huge difference in the eCPM. How?
Because of the source of the traffic. The geographical location of the audience plays a huge role in your earnings. For example, the traffic from the US is more valuable than the Philippines. If you own a site concerning a specific geographical location, it is recommended that you find a good ad network in your locality.
However, in the case of a global site, try to get premium traffic to see an increase in ad revenue. For that, you can run paid campaigns to drive the audience from a specific location or simply design your content in accordance with the targeted area.
Placement of Ad & Its Type
Advertisements that are placed in the most prominent space of the website, which is usually the above fold of the site, generate higher revenue. Not only that, but these ads also receive the highest number of impressions. So, place your ads ideally on web pages without hindering the content.
It’s equally important to place the right kind of ads. For example, using high-performing ad formats such as video or interstitial ads can increase your effective CPM. Once you have decided on the placement of ads and their type, keep optimizing from time to time as per requirements.
Seasonality Trends
Another factor that can affect your eCPM score is the changing seasons. In certain seasons, where there will be more online activities, you will see a rise in ad impressions and revenue.
For example, during the time of Christmas, when most people hop onto shopping websites, eCommerce websites will receive more traffic, and this will lead to higher eCPM.
On the other hand, in the summer season, travel websites may see an increase in traffic as more and more people are inclined towards going on vacation.
If you’ve tried the aforementioned method and still experiencing low eCPM, the following reasons may be to blame.
Why do I have a Low eCPM?
In case you’re wondering why you have a low eCPM, one of the major reasons
behind this would be the lack of competition. Since there will be fewer rivals locking horns against each other for the ad space on your website, the price would be comparatively lower.
Another reason can be the incorrect or inappropriate format of laying out ads. Not setting up the right ad format can potentially make the advertisement lose interest, leaving them uncertain whether or not the ads would work out well on your website.
Final Words On: What is eCPM
We learned what is eCPM, how it’s calculated, and how to increase it for publishers. It’s not that difficult to understand. Is it? It’s like any other factor for publishers uses to increase their ad revenue, a lot like RPM.
The strategies mentioned above can give you a great start.
Work on increasing traffic, quality content, and user engagement. And see the upward graph for your effective CPM.
We at AdPushup, put our focus on page RPM while helping publishers with their revenue goals. This is because we consider every page has unique value when it comes to securing ad dollars. And we achieve this through our machine-learning algorithm and in-house ad operations expertise. Feel free to reach out and ask our experts.
FAQs
eCPM stands for effective cost per thousand impressions or effective cost per mille. This is a publisher-side metric to measure/predict ad revenue.
Formula to calculate eCPM = (Estimated earnings/total impressions)*1000
CPM is an advertiser-side metric that tells how much an advertiser is willing to pay. eCPM is a publisher-side metric that tells how much a publisher is expected to earn.
To increase your effective CPM, we recommend improving the viewability score, trying active view ad refresh, increasing the number of demand partners, improve user experience and traffic. For more details, read this blog post.
It depends on the type of publisher you are and the traffic you get on your site. For instance, finance niche publishers are expected to get better eCPM than software niche publishers. Similarly, if you get traffic from tier-1 countries like the US and UK, advertisers should pay good bucks for your traffic. In the end, thorough research is required to measure the good eCPM for your inventory.
Deepak has a keen eye for detail and a deep understanding of the ad tech landscape. Whether it’s through in-depth articles, thought-provoking insights, or compelling storytelling, he’s dedicated to helping people navigate the complex world of ad tech with the simplicity of his words.
