Advertising Technology Analysis Series: what is the difference between CPM and eCPM?

2018-08-03
Developers have different types of advertising pricing models for hand travel /app publishers when they realize liquidity realisation. One of the most commonly used is the CPM pricing model based on advertising display quantity. CPM is the abbreviation of “cost per mille (thousand person cost)”, that is, the cost of displaying thousands of advertisements. Therefore, if a publisher’s CPM cost is $3 and the advertiser’s budget is $3000, the advertiser can buy 1 million advertising displays. But it is not true. It may be measured by the amount of advertising displayed by the publisher, compared to your original budget. It is called eCPM. ECPM (effective cost per mille, effective thousand person cost) refers to the actual advertising revenue generated from the 1000 advertisements. The formula is: eCPM = (total advertising cost / total number of ads measured) x 1000 Advertising Technology Analysis Series: what is the difference between CPM and eCPM? how to calculate eCPM? Suppose: there are 100 tulips on one of your flowers, $2 per one. Someone came in to buy 25 tulips for each 2 dollars, that is, the 25 tulips CPT (each tulip cost) is 2 dollars. But now the tulip season is over, and the remaining 75 tulips will be relatively dismal. Some people buy the remaining tulips at the price of 1 dollars each. You agree to sell it, so although the remaining 75 tulip CPT (tulips per tulip cost) is now $1, you have to find out what the real income of each tulip is. Therefore, we bring it into the eCPM formula to calculate the effective cost of each tulip. The total cost of tulips is divided by Tulip’s total number. The cost of eCPT is $1.25 per tulip. The calculation of eCPM is an effective method to calculate the maximum income of the two different advertising modes that are compared to the number of ads and CPM. It is similar to calculating the unit cost of goods when shopping. For example, you want to buy two bottles of detergent – 16 ounces are $3, and 24 ounces are $4 – and you may buy a 24 ounce of that detergent, because it’s lower in price. Similarly, if the ad A’s ad presentation is 1200 times, a profit of $5, the ad B’s ad display is 1500 times and a profit of $4, then you know the eCPM of the ad A is higher and the effect is better. The ability to calculate eCPM is an important first step, which helps you understand which advertisement performs better and why it performs better. If there are other issues in advertising, welcome to the AppLovin official website to read our ad technology parsing series, to understand the other aspects of the mobile advertising world, and to help you carry out the advertising business or realize the application. Or, you can also pay attention to the AppLovin WeChat public number and read our WeChat article, “the perfect balance between the user experience and the advertising change” and more details.

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