Digital Pill: eCPM Stands for..
The acronym eCPM stands for “effective cost per mille” and represents a standard unit of measurement that the publishers will use to compare all the ads run on their apps, whether they be based on CPM or CPI bidding. How does it work?
Two advertisers might have very different goals: a technology shop would run a CPM campaign to spread awareness (they pay for each impressions), a videogame developer will choose a CPI (they pay for each install) because they want their app to be downloaded.
The publisher will measure all the ads run on their app through the eCPM unit: we will take the CPI paid by the videogame developer and divide it by one thousand, translating the CPI into the cost of every single view (or impression). If, for example, one installation of the videogame has a CPI of 5 dollars, the cost of every impression of the technology shop ad will be 5/1000: 0,005 dollars (this is of course an average figure and aims to compare different campaigns showing up in our app).
In this way the publisher will be able to uniquely measure ad revenue and compare fairly CPM campaigns vs CPA ones.