How To Boost Your Ad Performance With eCPM Optimization

If you are a publisher who wants to monetize your website or app with display ads, you need to know how to measure and optimize your ad performance.

One of the most important metrics you should track is eCPM. It tells you how much revenue you earn for every 1000 ad impressions, regardless of the pricing model used by the advertisers (such as CPM, CPC, or CPA).

In this article, we will explain what eCPM is, how to calculate it, and how to increase it with some proven strategies.

By the end of this article, you will better understand how eCPM optimization can improve your ad performance and boost your revenues.

What Is eCPM?

eCPM is the short form for the phrase “effective cost per mille.” It is a metric that measures the average revenue you earn from every 1000 ad impressions on your website.

It is calculated by dividing your total ad revenue by the number of ad impressions and multiplying by 1000.

For example, if you earn $300 from 100,000 ad impressions, your eCPM is:

eCPM = ($300 / 100,000) x 1000 eCPM = $3

eCPM is useful because it allows you to compare the performance of different ad campaigns, formats, and placements across different bidding models.

For instance, some of your ad inventory may be sold on a CPM basis, while others may be sold on a CPC (cost per click) or CPA (cost per action) basis. eCPM helps you evaluate how much revenue you generate from each ad type.

eCPM vs CPM: What’s The Difference?

The main difference between the ecpm vs cpm is that eCPM is a revenue metric that publishers use to measure the effectiveness of their ads, while CPM is a cost metric that advertisers use to evaluate the price of their ads.

For example, if an advertiser pays $2 for every 1000 impressions of their banner ad, their CPM (cost per mile) is $2.

Another difference is that eCPM is an average of multiple CPMs from different advertisers and bidding models, while CPM is a fixed price for a specific ad campaign or format.

To illustrate the difference between eCPM and CPM, let’s look at an example.

Suppose you have two banner ads on your website: one sold on a CPM basis and one sold on a CPC basis. The CPM ad has a fixed price of $2 per 1000 impressions, while the CPC ad has a variable price depending on how many clicks it receives.

Let’s say the CPC ad has an average click-through rate (CTR) of 1% and an average cost per click (CPC) of $0.5.

If both ads receive 10,000 impressions each, the CPM ad will generate $20 in revenue ($2 x 10), while the CPC ad will generate $50 in revenue (10,000 x 0.01 x $0.5). The eCPM for each ad will be:

eCPM for CPM ad = ($20 / 10,000) x 1000 eCPM for CPM ad = $2

eCPM for CPC ad = ($50 / 10,000) x 1000 eCPM for CPC ad = $5

As you can see, the eCPM for the CPC ad is higher than the eCPM for the CPM ad, even though the CPM for the CPC ad is unknown. This means that the CPC ad is more effective in generating revenue than the CPM ad.

How To Increase Ecpm?

Increasing your eCPM means that you are earning more revenue for every 1000 ad impressions. This can have a significant impact on your overall ad performance and profitability.

Many factors affect your eCPM, such as:

•   The quality and relevance of your content
•   The size and placement of your ad units
•   The demand and competition for your ad inventory
•   The type and format of your ads
•   The optimization and targeting of your ads

To increase your eCPM, you need to optimize these factors and test different combinations to find the best ones for your website or app.

Here are some tips and strategies that can help you increase your eCPM:

Join Ad Networks Which Serve Your Geographical Traffic Region

Different regions have different levels of demand and competition for online advertising. Some regions have higher eCPMs than others due to factors such as market size, purchasing power, consumer behavior, and local regulations.

For example, according to this Appodeal report, the average global eCPM for mobile display ads in Q1 2023 was $6.45. Still, it varied from $2.30 in Africa, $5.50 in Europe, and $4.50 in Asia to $10.00 in North America.

Some countries with the highest eCPMs for these ad units are the United States, Canada, Australia, Denmark, and Switzerland.

To increase your eCPM, you should join ad networks that serve your specific geographical traffic region and have high fill rates and competitive bids for your inventory.

This way, you can ensure that your ads are relevant and valuable to your audience and that you are maximizing your revenue potential.

Set Up Networks For Multiple Ad And Increase Your Fill Rate

Fill rate is the percentage of ad requests that are successfully filled with an ad impression.

•     A high fill rate means utilizing your ad inventory efficiently and minimizing wasted opportunities.
•     A low fill rate means that you are losing potential revenue due to unfilled ad requests.

To increase your fill rate and eCPM, you should set up multiple ad networks and use a mediation platform or an ad server to manage them.

This way, you can create a waterfall or a header bidding system that allows you to send your ad requests to multiple sources and choose the highest bidder for each impression.

For example, if you have three ad networks: A with an eCPM of $3 and a fill rate of 80%, B with an eCPM of $2 and a fill rate of 90%, and C with an eCPM of $1 and a fill rate of 100%.

If you use a waterfall system, you can send your ad requests to A first, then B if A fails to fill them, and C if B fails to fill them. This way, you can increase your fill rate from 80% to 100% and your average eCPM from $3 to $3.18.

Using a header bidding system, you can send your ad requests to all three networks simultaneously and choose the highest bidder for each impression. This will increase your average eCPM from $3 to $3.36.

Test Out Different Ad Units

The size and placement of your ad units can significantly impact your eCPM. Different ad units have different levels of visibility, engagement, and demand from advertisers.

Generally, larger and more prominent ad units tend to have higher eCPMs than smaller and less visible ones.

You should test different ad units on your website or mobile app and see which ones perform best in revenue and user experience.

You should also consider using responsive ads that adapt to different screen sizes and devices.

Some of the highest-performing display ad units in terms of eCPMs are:

•     Interstitial ads: These are full-screen ads that appear between app sessions or content pages. They tend to generate higher eCPMs than other ad formats because they are more intrusive and attention-grabbing.
•     Rewarded video ads: These are ads that offer users an incentive (such as in-game currency, extra lives, premium content, etc.) for watching a video ad. They tend to generate higher eCPMs than other video ads because users are more likely to watch them in exchange for a reward.
•     Medium rectangle ads (300×250): These are banner ads that fit well within content or app layouts. They blend in with the surrounding content, making them less intrusive and more likely to be clicked on.

Optimize Ad Layouts

The layout refers to how many ads you show per page or screen, where you place them relative to each other and to the content, and how they blend with the design and user interface.

The best ad placements are above the fold, near the content, and in the user’s natural eye flow. For example, you can place a leaderboard ad at the top of your page, a medium rectangle ad in the sidebar, and a native ad within the content.

To optimize your ad layouts, you should follow these best practices:

Balance Quantity And Quality

Showing too many ads per page or screen can reduce their value and annoy users. Showing too few ads can limit your revenue potential.

You should find the optimal number of ads that maximizes revenue without compromising user experience.

Place Ads Above The Fold

The fold is the part of the screen that users see without scrolling down. Therefore, placing ads above the fold can increase their visibility and engagement rates.

Avoid Placing Ads Near Each Other

Placing ads too close to each other can create clutter and confusion for users.

It can also reduce their individual value for advertisers who want exclusivity and attention.

Align Ads With Content

Placing ads near relevant content can increase their relevance and click-through rates.

For example, placing an ad for travel deals near an article about travel destinations can create a better match than placing it near an article about sports.

Use Native Ads

Native ads are designed to blend in with the surrounding content and look like part of it.

They can improve user experience by reducing disruption and increasing trust. They can also improve advertiser performance by increasing engagement rates.

Improve Your Website Quality And User Experience

The quality and user experience of your website affects not only your traffic but also your eCPM.

If your website has high-quality content that attracts and retains users, it will naturally attract more advertisers willing to pay more for your increased traffic.

If your website has a fast loading speed, a responsive design, and a user-friendly layout, it will improve your user engagement and retention rates, which will also increase your eCPM.

Conclusion

eCPM optimization is an essential part of online advertising for publishers who want to maximize their revenue from their website traffic.

By understanding the distinction between CPM and eCPM and applying some of the optimization strategies mentioned above, you can create more effective and profitable ad campaigns that deliver value to advertisers and users.

We hope you found this article helpful and informative. Thank you for reading!

Additional:

• How To Manage Your Paid Ads Like A Pro
• The Ultimate Guide to Google Ads Campaign Management
• Why Should You Link Your Client’s Google Ads Account To The Search Console?