*What is eCPM? What Is the Formula?*

*What is eCPM? What Is the Formula?*

June 1, 2016

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In digital advertising, eCPM orÂ oCPMÂ stands forÂ "effective cost per mille" or "optimized cost per mille", respectively. For the convenience of this article, we will use eCPM. This metricÂ is the resultÂ of the ad revenue spentÂ in a campaign,Â divided by the number of ad impressions in thatÂ campaign in units of 1000. The formula to calculate eCPM varies by the type of campaign bidding/KPI you are using. This formula is especially useful for those who haven't adopted programmatic display or Facebook Ad Manager, which the platforms themselves would calculate this for you. Be sure to contact us if you wish to learn more after.Â Either way, eCPM formulaÂ still relevant knowledge that you can show off to the next digital marketer you talk to!

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#### Calculating eCPM for Branding Campaigns by CPC

For campaigns with a CPC bidding, you will need the following factors:

Find the number of ad impressions over a given campaign period

Find the number of ad clicksÂ over the same campaign period

Find your CPC bidding or average CPC bidÂ for the campaign

Once you know the factors, input them to the formula:

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(# of Clicks * CPC) / (# of impressions / 1000) = eCPM

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multiply the number of ad clicks by the CPC bidÂ to produce theÂ total spend

divide the number of ad impressions by 1,000 to produce # of 'mille'

divide the total spendÂ by the number of # of 'mille'Â to calculateÂ the eCPM

Here is an example from our actual reports:

Campaign AlphaÂ usesÂ CPC bidding & servedÂ 5Â million ad impressionsÂ in a period of 24Â hours

Within the same period, weÂ counted 10,000 clicks from Campaign Alpha

The CPC bid wasÂ $ 0.75

We can thenÂ calculate the eCPM forÂ this campaign with thatÂ CPC bid:

The total spendÂ was 10,000 clicks times $0.75Â equals $7,500

5 million impressions equals 5,000Â of 'mille'

the total spendÂ $7,500 divided by 5,000, producesÂ aÂ eCPM of $1.50

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#### Calculating eCPM forÂ CPA Campaigns

For campaigns measured by performance CPAÂ (cost per action, aquisition, conversions, lead, etc):

Find the number of ad impressions over a given campaign period

Find the number of actions/conversionsÂ over a given campaign period

Find the average CPA valueÂ for the campaign (total spendÂ / # of conversions, or set CPA goal)

Once you know the factors, input them to the formula:

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(# of actions * CPA) / (# of impressions / 1000) = eCPM

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multiply the number of actionsÂ by the CPA valueÂ to produce theÂ total spend

divide the number of ad impressions by 1,000 to produce # of 'mille'

divide the total spendÂ by the # of 'mille'Â to calculate theÂ eCPM

Here is an example from our actual reports:

Campaign Zulu with CPA goal servedÂ 3Â million adÂ impressionsÂ in a period of 24 hours

Within the same period, we trackedÂ 500 purchases from Campaign Zulu

the CPA goalÂ for the campaign was set at $12Â per purchase

We can thenÂ calculate the eCPM forÂ this campaign with thatÂ CPA goal:

total spendÂ was 500 purchasesÂ times $12Â equals $6,000

3 million impressions equals 3,000 blocks of 'mille'

the total spendÂ $6,000 divided by 3,000, producesÂ aÂ eCPM of $2.00

Caution:Â eCPM fluctuates with the market over time. Be sure to recalculate your eCPM every few weeks to ensure accuracy.

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#### BangPixels AdvertisingÂ Solution Will Calculate & Optimize eCPM for Your Campaigns

Working with us will ensure that you will always be up-to-date with your campaign's eCPM. One of our top levers for campaign optimization is eCPM. This metric not only tells you how efficient your media dollars are against your performance, it is also the key to lower your CPA dramatically. Are you interested to learn more? Fill out our contact form and let us help you understand eCPM!

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