well, i know CPM is cost per impression, for every 1000 page views, we get few bucks as publisher.
but what actually is effective cost per mile, eCPM? is that anything to do with CTR?
what is the formula calculating the earning of eCPM?
This is used if you on a CPC model. It’s basically just a conversion.
For example:
If you get $0.10 per click through, and it takes 2000 impressions to get a click, then your effective cpm is $0.05.
If you get a click every 1000 impressions, then your effective cpm is $0.10.
If you get a click every 500 impressions, then your effective cpm is $0.20.
To expand on that a bit further…
CPM = Cost Per Mille (how much you earn per thousand impressions)
This is normally used when advertisers are just paying for “eyeballs”, so for each 1000 impressions (ad views) you earn that CPM fee.
eCPM = effective Cost Per Mille
This is used to compare the different payment terms on a roughly equivalent level (you compare them all to a CPM model).
- If a CPC (Cost Per Click) ad had a eCPM of $1, that would mean that with the average percentage of clicks that ad was getting (Click Through Rate - CTR), the ad would earn you $1 per thousand impressions. In this case if the eCPM was $1, and the CPC was $0.05 then the CTR would be 20% or 0.2.
- If a CPA (Cost Per Action) ad had an eCPM of $1, that would mean that with the average percentage of users signing up/buying that the ad was getting, the ad would earn you $1 per thousand impressions. In this case if the eCPA was $1, and the CPA was $0.50 then for each thousand impressions 2 users would on average sign up/buy due to the ad.