Glossary
Mobile App Terminology simply explained

What Is eCPM?

eCPM means “effective cost per mille,” but it is also understood as “effective cost per thousand impressions.” eCPM indicates how much advertising revenue an app publisher generates per 1,000 impressions.

It is an important KPI in mobile marketing, as it indicates the profitability of the advertising inventory.  If app developers are showing a high eCPM, this means that the ads served on their app are performing well and converting users.
Key Takeaways
  • eCPM indicates how much advertising revenue a publisher generates per 1,000 ad impressions
  • It is an important KPI because it indicates the profitability of the advertising inventory
  • Publishers use eCPM to optimize ad placements, monitor monetization campaigns, and measure overall ad performance

Why Is eCPM Important?

Effective cost per mille is a significant key performance indicator, as it shows just how lucrative a portion of ad space actually is. App advertisers, publishers, and businesses alike can utilize eCPMs to optimize their strategies for clicks and monetization.

Expressed as a figure, the higher the eCPM, the more money is earned from adverts. Once you know how much you are generating per click, you can review different revenue streams and work to improve your eCPM.

abstract creative of effective cost per mille in mobile marketing

How Do I Calculate eCPM?

The formula for calculating eCPM is straightforward. Simply take the revenue generated from an advertisement campaign and divide it by the number of impressions. You then multiply this by 1,000 to determine both the effect of a specific advert or a whole inventory per 1,000. Most publishing platforms provide this information to their users, but it’s still good practice to understand how the figure is calculated.

What Is the eCPM Formula?

eCPM = (ad revenue earnings ÷ total impressions) × 1,000

CPM vs eCPM: What’s the Difference?

CPM simply stands for “cost per mille.” It’s a breakdown of how much 1,000 impressions cost and is simply a payment model. 

CPM and eCPM are not interchangeable. They are completely different metrics for measuring the cost of a campaign versus its effectiveness. CPM rate is the rate an advertiser is willing to pay for 1,000 impressions, where eCPM calculates the actual earnings of the publisher for 1,000 of these impressions. Both are useful in entirely different ways.

FAQs


What Is eCPM Advertising?

eCPM means “effective cost per mille,” a metric used to measure and predict ad revenue. It expresses the profitability of an ad inventory. It is an estimate of the revenue you receive for every thousand ad impressions.

How Do You Calculate eCPM?

eCPM is calculated as (ad revenue earnings / total impressions) x 1,000.

What Is a Good eCPM?

Simply put, the higher the eCPM, the higher the revenue a publisher generates from ads. What is considered good, however, is always relative niche and general audiences differ.

What Is the Average eCPM?

eCPMs vary widely and depend on a variety of factors, such as the location of the ad, the geography of the traffic, seasonality, site speed, and more. In general, eCPMs average between $4 and $10.


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