What is CPM?

What is CPM?: Cost Per 1000 Impressions

What is CPM?
CPM (cost per mille simply means cost per ad 1000 impressions. In the digital advertising ecosystem, CPM is the measurement tool, baseline, a minimum, or however you want to phrase it for buying and selling ad impressions.

Example CPM Calculation

For Example: is an advertiser pays $6.00 for 6,000 impressions, the CPM they are paying is $1.00. For every 1,000 impressions the advertiser credits the publisher $1.00. This is a fixed CPM model which makes it easy to forecast earnings.

eCPM: Effective Cost per 1000 Impressions

eCPM is the effective cost per 1000 impressions, or the actual revenue per 1000 impressions earned by a client. There are factors that can lower a publisher eCPM such as lost impressions in a CPM waterfall, low fill rates and discrepancies. It is important for a publisher to understand exactly how much they are earning from an ad network.  

Example eCPM Calculation

For Example: if a publisher is using an ad network to monetize and they send 1000 impressions and are compensated $5.50, then that publisher has an eCPM of $5.50. It is important as a publisher to understand exactly how much you earning from a revenue source and what true eCPM they are backing out into. If you send an ad network 10,000 ad impressions but they only track 9,000, then there is a 10% discrepancy. The best way for a publisher to protect themselves from lost revenue is to have a discrepancy clause in the contract that implements a max discrepancy.

CPM is the cost for every 1,000th impression when you are buying ad impressions (CPM buying method).

eCPM is the cost for every 1,000th ad impression, regardless of what buying method are being used (fixed price, CPM, CPC, CPA or CPO).