ECPM vs CPM – What is the Difference

ECPM vs CPM, what is the difference?  People are asking us this question all the time.  So what is the difference?  Think a better way to think of it might be to use and analogy.  Think of it as postal shipping and USPS vs UPS.  USPS being related to CPM and UPS being related to ECPM for this example.  CPM is like when USPS offers flat rate boxes, with this service you know exactly how much you are going to make based on how many shipments you need to make.  Each shipment cost the same, so each time you need to ship something you know exactly how much it will cost.  ECPM is like UPS, the cost is different everywhere you ship.  Sometimes it is less and sometimes it is more.

So if you have a CPM buy you typically are getting a guaranteed price per 1,000 impressions on the traffic you serve to the ads.  No surprises you know what you  are getting upfront.  eCPM you get whatever you get and you have no way of knowing how it is going to work out or how much moeny you are going to make.  The CPM per ad tends to flucuate daily based on many different criteria such as GEO, time-of-day, re-targeting, and many other forms of demographically information.  The Flat CPM generally works out to pay more and is generally better the RTB and/or eCPM models.  That said, there are not always enough Flat rate CPM buys available and out there.  So you have to supplement the remaining remnant traffic with eCPM/RTB type buying and campaigns.  In fact, in many cases you are almost better going with CPC, CPL and CPA deals which are also considered in a eCPM formula however NOT isolated.  When they are isolated you can maximize the conversion and greatly increase the eCPM like with paid links and images ads.

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