What is eCPM (Effective Cost Per Mille)?
eCPM is a metric used in digital advertising, typically within the world of monetizing mobile apps. eCPM is used to measure how much an advertiser pays an app publisher for an ad space per unit of 1,000 ad impressions. What's the word millie you ask? Millie is Latin for thousand!
CPM vs eCPM? What's the difference?
You may have heard of CPM, or cost per mille, which is a metric to measure the cost of an ad campaign and is also calculated per 1,000 impressions. CPM is simply a metric that measures cost whereas eCPM measures the overall effectiveness of a campaign. Let's break down the differences for app publishers and for advertisers below.
- For publishers: Again, eCPM for publishers is all about measuring whether the ads being served on your mobile app are effective. A high eCPM means that ads on your app are driving conversion events (mostly sign-ups & purchases) for the advertiser paying you, the publisher.
- For advertisers: For advertisers, the people paying app publishers to place ads on their app, eCPM is useful to understand the total ad revenue generated by an individual ad campaign. Ad networks (think Facebook, LinkedIn, Google, etc.) prioritize eCPMs with high revenue. This is because often time the Ad networks only get paid by advertisers based on conversion events. So if a campaign has a high eCPM aka a highly effective campaign, they will promote those ad placements more often than campaigns with low eCPM.
Why is eCPM (Effective Cost Per Millie) important?
For app publishers, eCPM is tied to revenue. Essentially, the higher the eCPM, the more profits the app publisher earns. eCPMs can also be used by app publishers to help predict and forecast future earnings.
How do you calculate eCPM?
It's actually a pretty simple calculation...eCPM is calculated by dividing the total ad revenue for a campaign by the number of ad impressions and then multiplying that by 1,000. Pretty much all ad network platforms will calculate eCPM automatically for app publishers. However what the ad network platforms don't often do is calculate the average eCPM across multiple ad platforms. Having the knowledge of how to calculate eCPM gives app publishers the ability to make better forecasts across all the ad platforms they're currently utilizing.
Five ways to increase eCPM
You might be thinking, "great, now I understand what eCPM is and how to calculate it but what can I do to improve my eCPM?". The truth is that there is no one single silver bullet to increase eCPM, it's more of an art than a science. Here are a few tips and ideas if you're an app publisher looking to improve your eCPM:
- Testing different types of ads → does your application just support banner ads? Maybe it's worth exploring video ads?
- Double down on whatever ad formats are performing the best → maybe you run banner ads, video ads, and have pop-up style ads but have you ever taken a look at which ad format is performing the best? Often times one format over performs the others, try doubling down on your strongest performing ad formats!
- Use multiple ad network platforms → Not all ad networks are perfectly alike, if you're only advertising with Google, maybe try exploring Facebooks platform.
- Improve your app's monthly traffic → If you don't have enough traffic to your app, it's going to be hard to rack up 1,000+ ad impressions. Explore ways to grow your monthly traffic.
- Increase your app viewability score → Have you heard about viewability scores? This is essentially how visible ads are within your app. If you're not monitoring app viewability score, I'd highly suggest you do. It's as simple as installing a new SDK. Learn more about tracking viewability scores here.