27 October 2012

What is CPM, CPI, PPC, CPA, CTR and EPCM in Google AdSense and other alternative of AdSense??

9:26 PM By Gaurav Sharma , , ,

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Today’s post is for those people who own a Blog/Website and a Google AdSense account as well.

I know that all you (publishers) who have an account on Google AdSense open it daily to just check “How much you earned today". Every time when you open your account, you see some unknown terms or words in your account like CPM, CPI, etc. and every time you see these terms, you ignore it because no one cares about it.

So, that is why, the above situation compels me to write something about these words used by Google AdSense. I am explaining these terms to you briefly and telling you about the meaning and algorithm/logic behind this words, which are extremely important to know because these words are used to generate your income as well.

So let’s begin understanding these terms.

First I should give you some description about these words.
CPM – Cost Per Thousand
CPI – Cost Per Impression
PPC – Pay per Click
CPA – Cost Per Action
CTR – Click through Rate
CPC – Cost Per Click
ECPM – Effective Cost per Thousand Impressions
 1 Impression = 1 Page View
Thousand = 1000 Impressions

Now, I am going to describe you about the above term's algorithm briefly…  

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CTR (Click through Rate) is a great way to find the success of any online advertising campaign. This CTR can be obtained by dividing the number of visitors who clicked on an ad, which is present on your website/blog by the number of times the ad was appeared on your website.

CTR (%) = (no of Clicks/ no of impressions)* 100

For example, if an ad appeared 100 times on your site and one visitor clicked on an ad, then the CTR (%) = (1/100)* 100 = 1%

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It is a great way of measuring performance of your different ad units, so this can be helpful in comparing their performance of your ads.

eCPM is calculated by dividing Total Revenue earned by the total number of impressions in thousands.

eCPM = (Total Revenue/Impressions)* 1000

For example, eCPM for 400 page impressions and $ 2.00 total revenue earned is equal to
eCPM = ($2.00/400)* 1000
           = $ 5.00

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CPM is calculated by dividing Impressions by thousand, and then multiplies with the CPM rate (which is decided by ad serving companies).

CPM = (Impressions/1000)
Total Price = CPM * CPM rate ($)

For example, one million impressions at $10 equal a $ 10,000 total price.
1,000,000/1,000 = 1,000 units
1,000 units * $ 10 CPM =$ 10,000 total price

I think, this is more than enough for you about the explanation of these terms which are used in Google AdSense.

However, if you have any further queries related to this post, then you can comment below…