Effective CPM or eCPM is a fundamental control metric. The effective CPM will allow us to measure the campaigns executed by CPC (Cost per click) and the campaigns by CPM (Cost per thousand impressions) in identical conditions.
In online Marketing strategies, effective CPM control is of great importance when it comes to defining the income or costs (depending on the perspective we value it from) our online advertising campaigns generate.
The Effective CPM From The Prism of Advertising Support.
If we have a blog or a site that generates a lot of traffic, the most logical thing is that we have “Google Adsense” activated so that said blog or site generates recurring income. In this case, the effective CPM measures how much we earn from effectively managing our advertising spaces (locations reserved for adsense or affiliate networks). It does not indicate how much we earn for each specific burner each time it is displayed on our site, specifically the earnings per every thousand impressions. The effective CPM, for all of us who make our site or blog an advertising medium, will allow us to define banners that offer us higher returns and, therefore, optimize our advertising spaces. After all, the objective should not be other than to maximize the potential income generated by our site.
An Example From The Perspective of Advertising Support
If our site or blog generates 10,000 impressions a day and Adsense through a banner positioned on our site, it pays us a CPC of €0.1, and we measure the income in one week. If of the 10,000 impressions, 10% are transformed into a click, we will have that the income from Adsense will be {100 €/day x 7 days= 700 € income/week} [eCPM= (700/70,000) x 1000 = 10 € of eCPM].
A clearer example, if possible, in terms of the usefulness of eCPM or effective CPM when measuring the profitability of the other advertising that is located on our site or blog, would be; Let’s imagine that we receive advertising from two advertising sources; Adsense and an affiliate network. Our website generates 20,000 impressions/day in such a way that 80% of these come from Adsense (CPC) and the remaining 20% from an affiliate network (CPL). If the Adsense banner gives us €0.10/click and the affiliate network Bunner makes us earn €7 per lead. In one week, we obtain the following income; Adsense income; €90. Income Bunner affiliation; €55 If we do not delve into the true concept of profit and let ourselves be guided by the figures as they are, It may seem that we earn more money with Adsense. Still, first of all, we must assess that we are dealing with two non-comparable amounts. Therefore we must determine the profitability of each of the sources of advertising income under identical criteria, which will allow us to compare the profitability of one to the other. This is where he gains weight CPM or Effective CPM. Transforming the two amounts to effective CPM values and thus making them easily comparable.
How To Transform The Amounts of CPC To An Effective CPM Amount?
The transformation is as simple as it is important.
Effective CPM (adsense) = [90/ (20,000 x 0.8)*7]x 1,000 = €0.80
Effective CPM (affiliate network) =[ 55/ (20,000 x 0.2)*7] x 1,000= €1.96
After this simple calculation, we can verify that, in this specific case, the really good thing would be the advertising derived from the banners of the affiliate network.
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