CPM, CPI, PPC, CPA, CTR and ECPM in AD serving logic

Many people wondering what is CPM, CPI, PPC, CPA, CTR and ECPM concepts. As I worked on ad serving projects so I created some points these concepts. I worked in to admedia domain for some years. I worked with openx adserver technology. I am going to give you very brief ieda about CPM, CPI, PPC, CPA, CTR and ECPM logics.

CPM, CPI, PPC, CPA, CTR and ECPM in AD serving logic

First I am going to give small description and brief about same.

CPM – Cost per thousand
CPI – Cost Per Impression
PPC – Pay per click
CPA – Cost Per Action
CTR – Click-through rate
ad serving
Click fraud
Cost Per Click
View-through rate
Clicktag

Breif description is helpful for common people as well as developers.

Impression – Per Page Views( per Page loads)
Click – Per ad click
CTR (Click through rate)
Click-through rate or CTR is a way of measuring the success of an online advertising campaign. A CTR is obtained by dividing the “number of users who clicked on an ad” on a web page by the “number of times the ad was delivered” (impressions).

Formulae:
CTR (%) = (Clicks/Impressions)*100

For example, if a banner ad was delivered 100 times (impressions delivered) and one person clicked on it (clicks recorded), then the resulting CTR would be 1 percent.
CTR (%) = (1/100)*100 = 1%

CPM (Cost Per Thousand Impressions)
The CPM model refers to advertising bought on the basis of impression.
The total price paid in a CPM deal is calculated by multiplying the CPM rate by the number of CPM units.

Formulae:
CPM unit = (Impressions/1000)
Total Price ($) = CPM unit * CPM rate ($)
Per Impression cost ($)= CPM rate ($) / 1000

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

The amount paid per impression is calculated by dividing the CPM by 1000. For example, a $10 CPM equals $.01 per impression.
$10 CPM / 1000 impressions = $0.01 per impression

ECPM (Effective Cost Per Thousand Impressions)
eCPM is calculated by dividing total earnings by total number of impressions in thousands.
It is a great performance measure for your various ad units, so when experimenting, you can use eCPM to compare your results.
Even for smaller sites, eCPM can be a useful statistic to track ad performance.

Formulae:
eCPM = (Total Earnings / Impressions) * 1000
Note : In openx total earnings refers to Rev (Revenue) in statistics

For example, eCPM for 370 page impressions and $1.48 total earnings will be :
eCPM = (Total Earnings / Impressions) * 1000
= ($1.48 / 370 ) * 1000
= $4.00

Reading this article, I think you will be able to catch the CPM, CPI, PPC, CPA, CTR and ECPM concepts