By Pep Canals, on 6 June 2023
Marketing metrics provide quantifiable data that is very useful when it comes to evaluating the performance of a strategy or action within a campaign. One of these metrics is eCPM, or Effective Cost Per Mile. But what exactly does this metric indicate?
Definition of eCPM or Effective Cost per Mille
The eCPM refers to the revenue earned for every one thousand ad impressions. It helps companies determine how effective their advertising campaign is. The eCPM can be used to optimize ad placements, monitor campaigns, and track overall performance.
How to Calculate eCPM and Why It's Important
To calculate the average eCPM, you can do the following operation:
Average eCPM = (Total revenue / Total impressions) x 1,000
This means that if, for example, you have obtained a total revenue of 1,000$ through 300,000 impressions, the average eCPM will be:
(1,000 / 300,000) x 1000 = 3.33$
What must be taken into account is that it's very difficult to determine a good eCPM, as this will depend on many factors, like the time of year, the performance of the website, and the ad placements and formats, among others. However, it is very useful to know the much it costs you to obtain those impressions and to determine how effective an ad space is for your brand.
Difference Between eCPM and CPM
It is very common to confuse the terms eCPM (Effective Cost Per Thousand) and CPM (Cost Per Mille), but within marketing they are different concepts.
The CPM is an advertising payment system that consists of paying a certain amount of money for every 1,000 impressions. The eCPM, on the other hand, refers to the cost of 1,000 impressions when the payment system does not depend on these, but depends instead on clicks, leads, sales, etc.
In other words, the CPM is not exactly a metric, but an advertising payment system. The eCPM is a metric.
How to Optimize Your eCPM or Effective Cost per Mille
One of the ways to optimize the eCPM is by choosing the right advertising platform, which must be in line with the audience you want to reach. This means determining your target audience beforehand to know where they spend time online. It's also a good idea to launch ads on several platforms to increase the eCPM.
In addition to the above, testing different types of ads and taking the utmost care in their design can be key to optimize this metric to the maximum. The more eye-catching and attractive the ad is, the more likely it is that people will click on it.