What is eCPM and How It Matters for Developers?

Many app developers tend to make a common mistake without having a clear understanding of eCPM meaning. Most of them opt for eCPM as the only metrics to evaluate some of their key parameters as well as enable analysis of ad format, network and inventory.

However, a few of them appear to use eCPM properly, which may result in additional costs. For this reason, it is vital to have the right answer to the question “how it works?”.

We decided to share some of the key aspects related to eCPM and share fundamental issues on this topic letting you understand how to use CPM formula and deal with other key tasks.

How Did eCPM Originate?

According to some official resources, the term eCPM can be defined as a Cost-per-Click auction that has a hybrid structure. It is one of the most recognizable and popular monetization models used by many application developers. At the same time, Google uses average eCPM to rate some types of ads that target specific websites and resources to oppose the keyword-targeted CPC ads. This is why it is actually considered as a hybrid auction.

What is eCPM in advertising and how does it work? These are the major questions for every app developer. The main idea of the model is the fact it is more related to cost but not revenue. Let’s say you are an advertiser who is operating on CPM basis. Yu can use the highest eCPM to come up with actual cost calculations. Pay attention that you can use the model to calculate the cost instead of revenue like many novice advertisers think. If you need to define your revenue, RPM would be a better alternative, as it is defined as the Revenue per Mile (a mile is 1,000 impressions).

eCPM VS RPM

We have advertisers with money on the one side and developers or content owners on the other side. The first ones care about eCPM only. For this reason, developers are often misled by that fact and consider the model as the only one to calculate their revenues, which is very wrong. Such random mentioning resulted in the fact that many networks introduce startapp eCPM as the tool to proceed with the income calculation for the content owners.

This is all due to a common delusion that eCPM equals RPM, which is certainly not. The terms are totally different and have a few features in common. The first model refers mainly to advertisers. Moreover, their costs are generally higher if compared with RPM and revenue performed by the publishers. The problem is that some networks work as intermediaries and charge 30% commissions from advertisers reducing the available rate of costs that seems to be equal to the revenue.

Whether to Rely on eCPM

On the one hand, the model is becoming extremely popular with both advertisers and content owners. It means that the term will stay with us for a long time. On the other hand, a publisher who is eager to benefit from detailed and the most accurate statistics reflecting the efficiency of the network and ad inventory, the model is hardly a good choice to rely on as well as RPM actually. Moreover, you need to keep in touch with some other rates like commissions, network payouts, traffic and monetization tools.

The only way to take the advantage of the most precise statistics and analytics is to use a versatile list of models and tools delivered by some networks. Of course, they may include Admob eCPM. However, the main idea is to have the metrics by your side letting you measure your ad request-based revenue instead of ad impressions.