This information can be used to compare revenue across channels that may have widely varying traffic. An eCPM tells you how ad inventory would perform if it was purchased on a CPM basis. This metric is used to measure the effectiveness or profitability of the ad inventory a publisher is selling. You might have heard the term ‘eCPM’ which stands for effective cost per mille.

So, if an advertiser bids an average of $0.0005 per impression to show an interstitial ad, it would achieve a $0.50 CPM for the campaign. Since each campaign has different parameters, each bid will likely result in a different payout. In the programmatic ecosystem, advertisers and DSPs (demand side platforms) bid in real-time for ad inventory, which entails bidding on individual impressions. Multiply this result by 1000 and you should get a dollar amount. Simply calculate the total cost of your ad campaign and divide that number by the overall impressions generated by the campaign. It’s simple to calculate your campaigns’ CPM. The same can happen on the mobile web and in apps. The same criticism happens on ads on the web: an advertiser will be charged for an ad that appears below a user’s browser window that they never actually saw because they never scrolled down. While a CPM is a simple way to buy mobile ad space, it comes under scrutiny for charging advertisers for impressions regardless of whether a consumer actually sees them. Marketers also often use this model to “back out” a CPC (cost-per-click) or CPA (cost-per-action) campaign to an estimated CPM. That is to say: not performance-based campaigns where conversions are involved. Traditionally, a CPM payment model is used to measure brand campaigns. This payment model sets up a campaign to charge marketers every one thousand times their ad loads on a mobile web page or in an app (which constitutes an impression). So, CPM stands for cost-per-thousand-impressions. CPMĬPM stands for “cost-per-mille” or “cost-per-thousand.” The reason why this description is marked by “CPM” (and not “CPT”) is because it uses the Latin Roman numeral abbreviation for thousand which is ‘M’. These are often the payment models used at the start of an app marketing campaign after which campaigns are optimized towards more specific, down-funnel goals like purchases or subscription sign-ups. This is especially true when it comes to evaluating the top-of-the-funnel marketing metrics of a campaign. Of all the payment models (CPI, CPA, etc.), CPM and CPC campaigns are, perhaps, the most valuable. CPM (cost-per-mille) and CPC (cost-per-click) are pricing models that help mobile marketers optimize campaign performance to align with their goals. In the alphabet soup of app marketing, CPM and CPC are some of the first acronyms you learn.

Cost per impression