Monday, 4 June 2012

Google Adsense – Part 1 – What is eCPM?

Google AdSense needs no introduction. Let me not explain it here and bore you guys. If you are new to it, catch the fundamentals here.
In this  Short Series Part 1, lets try to simplify eCPM and learn how to effectively increase your eCPM by the end of this short series.
What is eCPM ?
Definition : eCPM stands for Effective Cost Per Thousand Impressions – is the amount of revenue you earn from AdSense for every 1000 impressions that you show on your site.
  • eCPM = (Earnings / Page Impressions) * 1000
Well, let me make it more simpler by giving you few examples:
Eg 1 : If you get 10,000 page impressions and 200 clicks and earned $300, then your eCPM is $300/10,000 * 1000 = $30.
Eg 2: It you get 30,000 page impressions and 100 clicks and earned $500, then your eCPM is $500/30,000 * 1000 = $16.67 .
From the above, it is clear that eCPM is directly proportional to the revenue and inversely proportional to the ad impression.
So, now you know what actually the eCPM that appears on your Google AdSense account means !
Why eCPM is very important ?
  • eCPM is a primary factor that determines your earnings from AdSense.
  • It also helps you measure how well your ads are performing.
I now know eCPM. But I see something called RPM ? What is it ?
RPM – If you’re using the new interface, you’ll see that your reports now show RPM and not eCPM. RPM stands for Revenue Per Thousand Impressions. RPM is just another term for eCPM, and it’s calculated the same way as eCPM. AdSense now use these two terms interchangeably.
With this small introduction to eCPM, lets get to know few more important aspects related to it. In the next part, lets learn what are the factors that influence the eCPM ?

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