What is eCPM (effective cost per mille)?

Short answer. eCPM, effective cost per mille, is the revenue earned for every 1,000 ad impressions: total earnings divided by impressions, times 1,000. Despite the word "cost" it is a revenue metric, used by app publishers, and ad networks use it to decide which ads to show.

Definition

AppsFlyer defines eCPM as "the revenue earned by a publisher (an app owner) for every 1000 ad impressions displayed on their app," and notes that "although eCPM includes the word 'cost', it actually measures revenue." It is the mirror of CPM: "while eCPM is used by publishers to track their revenue, CPM is used by advertisers to control their spend."

Formula

eCPM = (total earnings / total number of impressions) x 1,000

For a network serving an advertiser who pays per install, the expected eCPM of that ad is roughly the install price times installs per thousand impressions, which is why IPM and eCPM move together.

Worked example (illustration)

These are made-up round numbers. An app earns $400 a day from ads across 100,000 impressions. eCPM = $400 / 100,000 x 1,000 = $4.00. On the advertiser side, an ad bidding $2.00 per install with an IPM of 3 is worth about $6.00 per thousand impressions to the network; the same bid with an IPM of 6 is worth about $12.00.

What a good or bad reading tells you

For a publisher, a higher eCPM means each impression earns more, from better placements, formats or demand. For an advertiser, eCPM is the reason creative matters to delivery. AppsFlyer explains that "ad networks use eCPM to rank campaigns when they're serving ads: campaigns that achieve high eCPMs are served more prominently and frequently, enabling these campaigns to increase their impressions and scale quickly." Unity makes the same link from the advertiser side: improved IPM boosts eCPM and a campaign's rank in network waterfalls.

So if your campaign is not spending at your bid, a low eCPM (often a low IPM) is a likely cause.

We give no benchmark eCPM. AppsFlyer notes it is "a dynamic calculation that's affected by the forces of supply and demand."

How it is used in app, game and brand advertising

Games that monetise with ads watch eCPM by placement and format, such as rewarded video, interstitial and banner, and set eCPM floors. Advertisers, games and consumer brands alike, meet eCPM indirectly: on in-app networks that rank by eCPM, an ad that converts earns the network more per impression and gets served more.

Common mistakes

1. Reading eCPM as an advertiser cost. It is publisher revenue.
2. Raising bids to fix delivery when the real problem is a low-converting ad.
3. Comparing eCPM across formats and countries without splitting them.
4. Setting floors too high. AppsFlyer notes that if no bid meets the floor, "the ad won't be served, and revenue will be lost."

Flixr's view

Our view: for advertisers, eCPM is the mechanism behind "creative is the targeting." The network funds the ad that earns it most per impression, so the creative decides how far a bid goes. That is the argument of our AppLovin creative guide and why playable ads and end cards get as much attention from us as the video.