The term “eCPM” or “effective cost per mille” refers to the publisher’s earning for ad space per 1,000 ad impressions (mille stands for thousand). eCPM is a key performance indicator that tells how profitable a specific ad space or even an entire app is.
App publishers use eCPM to analyze and optimize ad placements. They can also evaluate monetization campaigns and understand the overall metrics and performance. App publishers can maximize their ad revenues with a thorough understanding of eCPM.
This article will describe what eCPM is? How is eCPM computed? Why is it essential for an app publisher to increase and improve eCPMs? Is CPM and eCPM different? And how does eCPM varies through various stages of an app’s lifecycle? Let’s get started!
What is eCPM?
eCPM stands for “effective cost per thousand impressions”. The eCPM is an estimate of the money generated per thousand ad impressions.
eCPM is calculated on the basis of Total Earnings / Impressions x 1000 = eCPM.
eCPM is a statistic used to estimate the ad revenue publishers can expect from each thousand ad impressions. The greater the measure is shown on a variety of platforms, the more actual revenue the publisher generates from their ad inventory.
This measure is similar to RPM, which stands for revenue per mille or revenue per thousand impressions. Publishers use RPM, whereas eCPM is used by advertisers. However, publishers began using eCPM as well to correspond with the terms used by their clients. The majority of the industry now uses eCPM to calculate their profitability.
Understanding The Difference Between CPM and eCPM:
CPM and eCPM may sound similar to an outsider, but there is a significant distinction between the two.
CPM stands for cost per mille. It is a method of purchasing advertising in which advertisers are charged for every thousand impressions.
eCPM stands for effective cost per mille and states that the publisher’s revenue is narrowed down. If CPM helps advertisers determine the price of a campaign, eCPM is a calculation metric used to determine the rate at which a publisher has generated revenue.
CPM can only calculate cost per thousand impressions, whereas eCPM is a revenue metric used in any pricing model by advertisers and publishers.
Why Is Calculating eCPM Important for Publishers?
Calculating eCPM is extremely valuable for publishers since it provides a single metric for tracking the efficiency of an ad inventory across multiple ad networks. If your app allows full-screen interstitials and Mrec placements, eCPM can indicate which ad unit performs best and makes the most money.
Publishers can utilize this information to monitor the performance of their monetization strategies, optimize their ad placements, and implement other changes to the app itself.
eCPM is a credible metric for assessing the value of an ad impression and analyzing ad placement performance. eCPM is frequently used to establish the starting value of a bid in programmatic buying techniques such as app bidding.
What are the 7 Ways To Increase eCPM?
Here are the seven techniques for increasing eCPM and increasing your profit as an app publisher:
1. Play around with Ad Networks
Ad networks are demand and supply aggregators. They are responsible for ensuring that relevant advertisements are shown to your users.
Collaborating with the right ad network is vital. Yes, there are several sorts of ad networks in the market, each with its characteristics and offering distinct solutions.
For example, a vertical ad network can help if you have a specialty app. On the other hand, an inventory-specific ad network can provide unique solutions to a particular ad inventory. So, select ad networks cautiously based on your needs.
2. Use Ad Mediation Platforms or SSPs
Adverts served through ad mediation platforms have a higher success rate and eCPM. Ad networks often combine publishers and advertisers, assigning advertising based on their interests. SSPs, on the other hand, can assist you in overcoming the limits of ad networks. How is this possible?
A mediation company (also known as an SSP or Seller-side Platform) connects the publisher with several Ad Networks and Ad Exchanges. Because SSPs already deal with numerous demand sources (Ad Exchanges, Ad Networks, DSPs, etc.), they can expose your inventory to additional bidders, raising eCPM.
3. Experiment with various ad formats.
Experimenting with ad formats is difficult, but it can increase your eCPM if done right. Some ad formats may always work for an app publisher but may not for others. So, you can’t use a standard set of ad formats in the hopes of increasing your eCPM.
However, banners, interstitials, and videos are among the most commonly used ad formats. A great way to tackle this problem is to work with a third-party ad operations team (like AppBroda) that runs experiments for you and understands industry benchmarks.
4. Changing the Ad Placement
Experiment with alternative ad placements throughout the app, using a variety of ad formats and sizes. Keep the statistics close and calculate the eCPMs to identify the ideal placement of the ad. If done correctly, suitable placements can yield enormous gains.
5. Keep An Eye On Your Industry’s eCPM
We have all seen how the quantity demanded ad format grows as consumers’ behavior changes (Example: Video ads on Tiktok and Instagram). App publishers must monitor their niche and the industry average eCPM to keep up and evolve. Trying to keep an eye on the competitors, maintain eCPM and eventually increase it to generate more revenue.
6. App Store Optimization
The more visitors there are, the more likely they are to interact with advertisements. Hence, optimizing your app store listing on Google Play, App Store, and other app distribution platforms is necessary.
An increased DAU/MAU will deliver more ad impressions, leading to higher clicks and ultimately higher revenues. Although, not all traffic sources increase your eCPM. However, a larger DAU/ MAU can undoubtedly boost your overall revenue.
How to Increase eCPM in the various Phases of your App?
As we understand, there are three phases to an app’s lifecycle:
- Launch Phase
- Growth Phase, and
- Maturity Phase
You can enhance the eCPM in each phase by implementing numerous tactics throughout the app’s lifecycle. However, you must handle each phase individually.
How to Increase AdMob eCPM in the Launch Phase of your App?
You’ve turned your concept into a mobile app, got a few downloads, and are attempting to study user behavior. What’s next? And how can you increase your eCPM in the launch phase?
Here are some ways:
- Use the right ad formats
- Use the right ad placements
- Do not try mediation
How to Increase AdMob eCPM in the Growth Phase of your App?
Increasing eCPM throughout an application’s growth phase is time-consuming, but it is doable provided the strategies are aligned.
Here are some tactics:
- Try ad mediation & open bidding
- Try displaying competitor ads
- Get show rate > 60%
- Add multiple ad calls
How to Increase AdMob eCPM in the Maturity Phase of your App?
Following the methods below, you can increase the AdMob eCPM and boost your revenue in your app’s mature phase.
Here are the methods:
- Analyze your historical data and form a baseline
- Experiment with ad formats specific to devices & geo’s
- Try multiple ad networks
- Re-analyze your mediation strategies
- Recognize the seasonality of ad networks & setup control groups
- Define ad experience geographically
eCPM is quite simple to grasp, and when broken down, it becomes much easier to go towards fresh ideas to increase eCPM.
Obtaining an optimal eCPM during the early efforts is not attainable. Test a variety of ad networks, ad placements, and ad layouts to see which ones produce the highest eCPM. The techniques presented here are just the beginning and continue to expand.
If you still have doubts, reach out to our industry experts at AppBroda. We help app publishers optimize eCPM on multiple ad networks, including Google AdX. For more information, book a free consultation today!