eCPM is the cost that tells how much amount your campaign has spent to buy 1000 impressions. By measuring eCPM you can understand how effectively your campaign buying impressions.
Those who are searching like “what is eCPM?” “What is the difference between CPM and eCPM?” “How to calculate eCPM?” will get a clear answer after reading this post. Those who are running a digital ad campaign for themselves or for an agency will get benefit from this post.
Topics :
What is the formula to calculate eCPM?
What is the difference between CPM vs eCPM?
How to reduce the eCPM for a digital ad campaigns?
What is eCPM?
eCPM stands for effective cost for thousand impressions or effective cost per mille. How much the advertiser spent to deliver a thousand impressions is defined as eCPM cost. For example, the campaign eCPM is $6, which means the advertiser spent $6 to deliver every 1000 impressions, $12 means this advertiser spent $12 to deliver every 1000 impressions.
What is the formula to calculate eCPM?
The following simple formula is used to calculate the eCPM of your ad campaign.
eCPM = (Total Spend/Total Impressions)*1000
For example, If your campaign has delivered 5000 impressions and the advertiser invoice is $50 means,
eCPM = (50/5000)*1000
= $10
So, here the eCPM is $10. This means that this advertiser spent $10 for serving 1000 impressions.
What is a good eCPM?
eCPM stands for the amount spent for 1000 impressions. So, low eCPM is good for the advertiser. Normally, advertisers run their ad campaigns to achieve a particular goal. It may be the number of impressions, it may be the number of clicks or it may be the number of leads. So, achieving the results by spending low money is good for the advertiser.
What Is #eCPM? How To Calculate eCPM?
eCPM is the cost that tells how much amount your campaign has spent to buy 1000 impressions. By measuring eCPM you can understand how effectively your campaign buying impressions.
Read Here : https://t.co/upZ6gSfSKe#CPM #eCPM
— Sri Marketing Strategy (@DigiAdvCourse) October 6, 2023In general, a good eCPM for the advertiser is between $4 to $8. Various factors need to be considered before deciding on a good eCPM. For example,
> Platform
> Competition
> Data Cost
> Ad Format
> Inventory
> Bid Optimization
Read this post : Difference between Dynamic Bidding (dCPM) vs Flat Bidding (CPM) methods? How advertisers choose the bidding method?
What is the difference between CPM vs eCPM?
CPM also stands for cost for thousand impressions. But, there is a difference between the CPM and eCPM. CPM shows the cost for thousand impressions, while eCPM shows how much amount actually spent to deliver a thousand impressions. So, eCPM is the final cost for the thousand impressions.
How to reduce the eCPM for a digital ad campaign?
Reducing eCPM is good for the advertiser. So that they run a digital ad campaign with lower ad spend. Read my suggestions and apply them to your ad campaigns.
Platform
Choosing the right platform is a very most important step for running a digital ad campaign for any brand. Normally, advertisers run their ad campaigns to achieve a particular result. As I said above, it may be the number of impressions, the number of clicks, or the number of leads.
Advertisers can run their ad campaigns on any platform. They can run their display and video ad campaign on programmatic ad platforms like DV360, Amobee, Pubmatic, etc. Also, they can run their ad campaign on social media platforms like Facebook, Instagram, Tiktok, etc. Each platform is good at something. So, choose the right platform where you can achieve your results by spending low.
Competition
eCPM completely depends on the competition. Like you, many brands run their ad campaign to acquire the same results. For example, many insurance companies run their ad campaign to target the same audiences to acquire leads. For example,
A and B advertisers run their ad campaigns for the same goal. Advertiser A runs their ad campaign with a bid price $5 and B runs their ad campaign with a bid price $7. By considering the bid price, B wins in the auction. If advertiser C wants to run their ad campaign for the same targeting then they should run their ad campaign with a bid price above $7. So, competition is very important for the final eCPM.
Data Cost
If you are running audience targeted ad campaign means you should pay data cost for using the data. Higher data cost leads to higher eCPM. So, you should choose the data provider that has the lower data cost. For example, you want to target the “Insurance” audience, and this category is available on Datalogix with a CPM price $1 and Eyeota with a CPM price $2. Here, you should choose the Insurance category from the Datalogix data provider. So, that only you can get a lower eCPM. But, if your campaign does not perform well by using this category then you have no choice and you should choose the higher data cost category. But, always start with lower data cost data providers.
Ad Format
Ad format is also an important factor for the final eCPM. So, before running an ad campaign on any platform, check with them about the CPM cost for each ad format. Choose the right ad format to lower the final eCPM
Inventory
You can access various inventory sources [ad exchanges] when you run your ad campaign on DSP’s. If you do not have the expected CPM price per the inventory sources at the initial stage, you can run your campaign for a few weeks and get the eCPM per the inventory sources. If you feel that any inventory source has higher eCPM without good results you can exclude them from your campaign.
Bid Optimization
Bid optimization is very important for increasing the pacing and performance of an ad campaign. It’s also important to save your money by reducing the eCPM. Initially, we do have any idea about our competitor’s bid information. So, start with a low bid price and increase if it’s needed. Currently, most of the ad exchanges are using the first price auction method. So, if you set a higher bid price then you should pay higher even though your competitor bid very low. Also, use options like “Bid Shading” to save your money [Few DSP’s has this option to save advertiser money]
What Is First Price Auction? First Price Auction Vs Second Price Auction
What Is Bid Shading? How Does Bid Shading Work In Digital Advertising?
Conclusion
Publishers get higher money when eCPM is high, while Advertisers spend more money when eCPM is high. This article is completely written for the advertiser. So, I have shared the suggestion to reduce the eCPM cost. I hope this article helps you to understand all about eCPM. If you have any additional questions or suggestions please share your thoughts in the comment section!
