You may have learned about CPM, but then you got confused when you learned about eCPM. That’s true with a great deal of publishers. ECPM or Effective CPM is another key metric used to measure the ad revenue. But before getting to it, let’s recap the fundamentals.
CPM or Cost Per Thousand Impressions is the amount advertisers are prepared to pay for every thousand impressions they receive. It’s an advertisers’ side metric which help them determine the budget of the campaigns.
CPM is calculated using this formula:
By way of example, if an advertiser has a budget of $100 and wishes to achieve 100,000 users, then his/her CPM would be $1, i.e., ($100/100,000)*1000.
What’s eCPM Different?
eCPM or effective CPM is the revenue earned by a publishers for every thousand impressions. You want to pay special attention to the term’successful’. Here, effective CPM means the revenue earned by the publishers, effectively.
Confused? Let us try again. ECPM is the cumulative revenue generated by publisher per thousand impressions, some of which also get clicked, then converted into leads, and become clients for the advertisers. Hence, eCPM is not just calculated using CPM campaigns but also CPC, CPL, and other similar campaigns running via publisher’s inventory.
ECPM is called by the ad network of the publisher using this eCPM formula:
But, it seems a lot like RPM (revenue per thousand impressions)
Google AdSense used to predict publishers’ earnings using eCPM in their past versions. However, newer AdSense models show RPM instead of eCPM. Meaning, eCPM and RPM refer to the same thing, according to AdSense. However, if you are partnered with different ad networks, it is far better to clarify together with the metrics they use to predict your earnings.
To put it simply, CPM is the money advertisers spend on a campaign. And eCPM is the amount earned by the publisher.
Why eCPM is Important
ECPM helps predict the earnings of the publishers. A target earning number can work as a motivation for publishers to work so. If you are performing ad testing to locate the best performing ads for your website, then eCPM achieved for different advertisement tests can help you pick the winner ad.
However, you must always bear in mind that eCPM is a forecast, and the real earnings can vary. Also, don’t get confused between eCPM and RPM, both mean the same. Hence, whether you work on raising RPM or eCPM, your ultimate goal is still the same: maximizing ad revenue.
The Way to Increase eCPM
ECPM can be tricky to work with, as there’s no guarantee that you will earn the amount predicted by your eCPM calculation. However, as a publisher, you can definitely work on increasing the performance of your inventory. Here are factors you can start working on:
1. Increase Monthly Traffic
Your monthly traffic is directly proportional to your own earnings. This is the reason monthly traffic is the first thing asked by ad networks and advertisers when they search for publishers. Similarly, in order to maximize the earnings, start with increasing your site the traffic. It is possible to opt for organic, paid or both methods of getting traffic, based upon your budget.
2. Partner with Multiple Ad Networks
Ad networks help you create demand for your inventory. Partner with multiple ad networks for greater demand and value to your stock. Do your research to find ad networks offering better deals for different geographical locations. Adding multiple networks can get your stock to high paying advertisers. Also, it can increase the competition in your stock, and hence your earnings.
3. Use Different Ad Formats
When it comes to ad format, go with what your users like. For that, you need to ace your testing game. Publishers have multiple ad formats available to run tests and find the best ones. Here are some commonly-used ad formats:
Banner ads: Simple image with text in square or rectangle shapes (such as 250×250, 720×90, 300×250 and more). Due to their simplicity and effective results, banner advertisements are the go-to solution for many publishers and advertisers.
Rich media ads: These are heavy, graphic and media-rich advertisements which are interactive and attractive for users. These creatives are generally preferred for reducing banner . However, rich media advertisements are heavy in file size as they are in gif or video formats.
Video ads: Video ads get the consumer attention in the first few seconds, and can lead to better engagement in contrast to other formats. Hence, video ads are worth trying. Especially for video publishers, video ads are a must-try format.
Native advertisements: These advertisements blend with the content of this webpage without disrupting user experience. Native ads look like the organic content of the page and are proven to be beneficial for publishers with participated, content-consuming users.
It is suggested to experiment with the combination of these ad formats to see better results.
4. Work on User Experience
An individual who lands on your webpage but gets overwhelmed with ads will leave. This is a indication of lousy user experience. Such practices lead to the use of ad blockers among users, further reducing your eCPM. In fact, most ad networks block publishers’ accounts for poor consumer experience. So, follow best practices while creating ad placements.
5. Get Search Engine Traffic
With good search engine optimization practices, you get relevant users landing your website. The majority of these are of high-intent users and can offer quality impressions. Quality impressions benefit advertisers using their effort and publishers by increasing their eCPM.
6. Make Your Website Mobile-Friendly
Mobile users have surpassed the total desktop users. Hencethis is the ideal time to begin driving traffic from mobile users as well. For that, you will need to work on making your site mobile friendly; starting with AMP or PWA may be good options. Next, you can try mobile ad formats and dimensions to make the most out of mobile ads.
7. Know the Value of Your Niche
The ad industry has seen that advertisers pay more for a niche audience. Some niches are more precious than others. Assess whether you fall under the category of expensive keywords. If yes, you’re in luck and can make a fantastic ad revenue from the marketplace.
8. Determine the Source of Your Traffic
The content and market of your site can be just the same as another site. However, there can be a huge difference in the eCPM. How? Due to the source of the traffic.
The geographic location of the audience plays a huge role in your earnings. By way of instance, the visitors from US is more valuable than Philippines. If you own a site targeting a specific geo, it is strongly recommended that you find a fantastic local ad network.
However, in the event of a global website, try to find premium visitors to see an increase in ad revenue. For that, you can run paid campaigns to drive audience from a specific location or simply design your articles in accordance with the targeted area.
We learned eCPM is the’effective’ earnings generated by publishers for each thousand impressions. It is not that difficult to comprehend. Is it? It is like any other factors for publishers used to increase their advertising revenue, much like RPM. The strategies mentioned above can give you a terrific start.
Work on increasing the traffic, quality content and user engagement. And you will see an upward graph for your effective CPM.