CPM, which means “cost per thousand impressions,” is a standard way of measuring and comparing advertising costs. ecpm is an AdSense publisher’s-eye view of the same thing: It means “effective CPM,” and it tells the publisher how much he or she is earning from every 1,000 AdSense impressions.
ecpm is easy to calculate: Just take total earnings for a day, week, year, or whatever and divide by the number of 1,000-impression blocks. For example, if you have $5,000 in earnings and 1,000,000 impressions:
$5,000 divided by 1,000 = $5 ecpm
If you have $1,200 in earnings and 780,633 impressions:
$1,200 divided by 768.633 = $1.56 ecpm
ecpm is a useful metric because it lets you compare AdSense with other sources of income. It also gives you an overall view of performance trends. Let’s say, for example, that you’ve got a site on ice fishing. In winter, you earn $5,000 a month from AdSense, but then summer comes and your AdSense revenue drops to $1,000 a month. If you were to judge AdSense’s performance by total revenues alone, you might think that AdSense was performing poorly, when in fact revenues are down only because traffic drops in the summer on your ice-fishing site. By comparing month-to-month ecpm instead of total revenues, you get a more accurate picture of AdSense performance.