Effective Cost Per Mille (eCPM) | Definition & Formula
Learn what Effective Cost Per Mille (eCPM) means, how it relates to cost per mille advertising, and use the cost per mille formula to calculate revenue.
Glossary
1
min read
What is Effective Cost Per Mille?
Effective Cost Per Mille (eCPM) is a metric that shows how much revenue a publisher earns for every 1,000 ad impressions. Despite the word “cost,” it reflects publisher earnings, not advertiser spend.
In cost per mille advertising, advertisers bid for impressions (1,000 views of their ad). eCPM helps publishers understand the true value of their ad inventory by averaging revenue across all campaigns, regardless of whether advertisers are paying by CPM, CPC, or CPA models.
For advertisers, eCPM offers insight into how competitive placements are performing. Higher eCPM signals strong engagement and more valuable impressions, which means those ad spots can command higher bids.
Cost Per Mille Formula
The cost per mille formula for calculating eCPM is:
eCPM = (Total Earnings ÷ Total Impressions) × 1,000
Example
If a publisher earns $700 from 200,000 impressions:
($700 ÷ 200,000) × 1,000 = $3.50 eCPM
This means the publisher generates $3.50 in revenue for every 1,000 impressions.
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