Effective Cost Per Mille, often abbreviated as eCPM, represents the revenue generated for every thousand ad impressions. It is a crucial metric in online advertising, providing a standardized way to compare revenue across different ad campaigns and platforms. The calculation involves dividing the total earnings by the number of impressions (in thousands). For instance, if an ad campaign generates $500 from 100,000 impressions, the eCPM would be $5.00 ($500 / (100,000/1000) = $5.00). This allows publishers to understand how much revenue each thousand impressions are yielding.
This metric provides a valuable overview of advertising performance. Its significance lies in its ability to facilitate comparisons between disparate campaigns, ad networks, and even websites. A higher value indicates more effective monetization of ad inventory. Understanding this allows publishers to make informed decisions about ad placement, pricing strategies, and the selection of advertising partners. Historically, this metric emerged as the online advertising landscape matured, becoming a standard benchmark for publishers and advertisers alike, enabling a clearer understanding of ad performance and revenue generation.
