CPM or eCPM calculator? Find out what's relevant to your business results
Whether you're looking for the best advertising strategy for your business or you're selling digital advertising, the critical metrics of campaign quality are relevant to everyone. Even if you're new to the field, you've probably heard the term CPM before, but eCPM still raises questions even for those who are far from calling themselves marketing newbies. After reading this article, you will learn what are the essential differences between the two indicators, how the eCPM calculator works and how you can optimize your ad impressions for the maximum benefit of your business.
What is CPM?
CPM is encrypted as "Cost per mille" (the Latin word "mille" means thousand). This is the price a client pays per thousand impressions of their ad, which we calculate by dividing the full campaign budget by the total number of views and multiplying by one thousand.
Example: Imagine that you invested 10 euros and received 10 impressions, then we will calculate CPM according to the formula:
10/10000×1000= CPM 1 euro
Thus, CPM is not only a model of advertising taxation, but also an important indicator of campaign effectiveness. By tracking and analyzing CPM, you can better plan, optimize and manage your budget and achieve other campaign goals. Although CPM is often criticized for its loopholes that allow manipulation of impression numbers, this model remains extremely relevant in the world of digital marketing, especially when it comes to increasing brand awareness.
What is eCPM Calculator?
At first glance, it is obvious that both CPM and eCPM are related terms. The "e" in front stands for "effective" and represents the actual CPM, independent of the ad model you choose. This means that both metrics are two sides of the same coin: CPM is relevant to those who buy views exclusively, while eCPM shows how much you pay per 1000 impressions, even if you have chosen CPC, CPA or another strategy.
In the past, the eCPM calculator was mostly used by advertisers seeking detailed data analysis. However, recently, this indicator has become relevant for the other side of the advertising publishers as well, replacing RPM ("revenue per mille") or revenue per thousand impressions. In this case, eCPA is superior in that it allows the publisher to better understand the customer and reconcile the data on both sides. Today, eCPM calculators are mostly used by publishers to calculate preliminary campaign profits and set goals for future campaigns.
How is eCPM calculated?
The eCPM calculator works on the same principle regardless of the advertising model you choose: the total amount generated is divided by the number of views and multiplied by a thousand. If you don't have a final amount yet, you can tentatively determine it by multiplying it by the number of clicks if it's a CPC campaign, by conversions if it's a CPA campaign, etc.
Take a look at the table comparing three different ad campaigns:
| Model | Price | Demonstrations | Click on it | Actions | CTR% | CPM | CPC | CPA | eCPM | eCPC | eCPA |
|---|---|---|---|---|---|---|---|---|---|---|---|
| CPM | 18,000 | 6,545,159 | 4,598 | 28 | 0.07 | 2.75 | - | - | 2.75 | 3.91 | 642.86 |
| CPC | 10,000 | 3,245,195 | 2,000 | 19 | 0.06 | - | 5.00 | - | 3.08 | 5.00 | 526.32 |
| CPA | 35,000 | 9,519,182 | 7,456 | 35 | 0.08 | - | - | 1 | 3.68 | 4.69 | 1 |
This example clearly shows how CPM and eCPM data correlate with each other and how calculations work in other advertising models. And do you use an eCPM calculator?
If you don't have room for extra tables and calculations, entrust your numbers to marketing professionals. AdSEO specialists will put together your strategy, determine the effectiveness of existing campaigns and help you make the most of every euro spent on advertising.
How to improve your eCPM?
In order to optimize your data, you need to know what to resist. The average eCPM ranges from 4-10 euros, however, numbers without context are not valuable. eCPM depends on many factors, so its evaluation requires contextual indicators of both you and the industry.
If your eCPM calculator results don't meet your goals after thorough research, here are a few essentials to start with:
- Test different ad formats and sizes.
- Optimize ad placement.
- Work on the number of views.
- Improve user experience.
- Optimize for on-page SEO.
- Make sure your website is mobile friendly.
eCPM is affected by many factors such as seasonality, target audience, industry, site speed, target audience engagement and many others. If you want to learn more about this topic, we recommend that you read AdSEO's article on CPM - there you will find a lot of useful information that you can successfully apply when deepening your knowledge of eCPM.