Definition:

It is the effectual amount of money over a thousand impressions. It especially refers to effectual cost contained in every thousand.

Information:

eCPM aids in measuring media with the help of various payment procedures in such a way that everything is changed into common metrics. This may be beneficial if a combination of designated ad buys in cost per action, cost per impression, cost per lead, cost per click, sponsorships based on set rates, or other payment procedures. Ever so often, eCPM concerns revenue per thousand impressions on behalf of the publisher.

You can estimate eCPM if you know the impressions and cost.

Total cost

eCPM = —————– x 1,000 or eCPM = total cost / (impressions / 1,000), eCPM = (CPC x clicks) / (impressions / 1,000), eCPM = (CPL x leads) / (impressions / 1,000).

    Impressions

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An example is that an advertising campaign has 2 000 clicks per 100 000 impressions and a CPC (cost per click) of $1.50.

First stage = ($1.5 x 2,000) / (100,000 / 1,000)

Second stage = $3,000 / 100

Third stage = $30 eCPM

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This can also be applied to campaigns that you have not organized so far by using suppositions regarding the variables of performance and placing the information of variable costs with respect to impressions.

An example is an advertising campaign with CTR of 1 per cent approximately and CPC of $3.00 approximately.

Stage 1 = ($3.00 x 1% x 1,000)

Stage 2 = 3 x (0.01 x 1,000)

Stage 3 = ($3.00 / click x 10 clicks / 1000) = $30 eCPM

Related Terms:

Customer Acquisition Cost,  conversion rate, cost-per-action (CPA), cost-per-click (CPC), CPM (Cost per mile)

Source : Krcmic.com