Revenue Optimization

eCPM: Understand, Calculate, and Increase Effective CPM

You must have learned about CPM. But, you got confused when you found out about eCPM. That’s the case with a lot of publishers.eCPM or Effective CPM is another key metric used to measure the ad revenue. But before getting to it, let’s rewind the basics first.

CPM Definition

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 help them decide the budget of their campaigns.

CPM is calculated using this formula:

CPM 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.

eCPM Definition

eCPM or effective CPM 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, 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 publisher’s inventory.

eCPM is predicted by the ad network of the publisher using this eCPM formula:

eCPM Formula

*The result is estimated based on provided data

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 pageviews, number of ad units, fill rate, 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 for 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 estimated revenue generated per thousand impressions, and RPM is amount earned by publishers per thousand pageviews.

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 by our machine-learning algorithm and in-house ad operations expertise. Feel free to reach out and ask our experts.

Why eCPM Metrics is 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 an inventory. This is why we advice 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 second).

In theory, this allows publishers to inflate their inventory size. However, there are certain best practices 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 advertiser’s dollar at good use and at the same time, helping publishers with their revenue.

Resource to check: The Essential Guide to Ad Refresh

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 image 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 which are interactive and appealing for 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 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. 

Work on User Experience

A user who lands on your webpage but gets overwhelmed with ads is going to leave. This is a sign of 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.So, place your ads ideally on webpages without hindering the content. 

Get Search Engine Traffic

With good SEO practices, you get users landing your website. Most of these are of high-intent users and can provide quality impressions. Quality impressions benefit advertisers with their campaign, 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; start 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 that 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.

valuable niche and expensive keywords
Image Source: Wordstream

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 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 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. 

Conclusion

We learnt, eCPM is the ‘effective’ revenue generated by publishers. It’s not that difficult to understand. Is it? It’s like any other factor for publishers used to increase their ad revenue, lot like RPM. The strategies mentioned above can give you a great start.

Work on increasing the traffic, quality content and user engagement. And see the upward graph for your effective CPM.

FAQs

What does eCPM stand for?

eCPM stands for effective cost per thousand impressions or effective cost per mille. This is a publisher-side metric to measure/predict ad revenue.

How to calculate eCPM?

Formula to calculate eCPM = (Estimated earnings/total impressions)*1000

What is the difference between CPM and eCPM?

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.

How to Increase eCPM?

To increase eCPM, we recommend to improve viewability score, try active view ad refresh, increase number of demand partners, improve user experience and traffic. For more details, read on this blog post.

What is a good eCPM?

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. At the end a thorough research is required to measure the good eCPM for your inventory.

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