Townsend Tech Tools
The acronym eCPM means ‘effective cost per mille’. It is the outcome of a calculation of the ad revenue generated by a banner or campaign, divided by the number of ad impressions of that banner or campaign expressed in units of 1,000. The ‘M’ for mille in the name comes from the Latin meaning 1,000. The formula to calculate eCPM is not all that complicated, once you realize the components that go into the computation.
When the campaign has a rate expressed in CPM (cost per mille), there is not a lot that needs to be done. The CPM rate is by definition identical to the eCPM value of that campaign.
For campaigns with a CPC rate, the calculation works like this:
Once you know this input data, the formula is:
Let’s use the following fictional numbers for an example:
We can now calculate the eCPM of this campaign with a CPC rate:
In reality, you will probably never see nice round numbers like these, but if you use the formula explained above, it is simple to compute the eCPM value of a CPC campaign for any given time frame.
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