1 Introduction - 2 Ad Rank - 3 Quality Score - 4 Advert Price
5 eCPM - 6 eCPM explained - 7 Statistics - 8 Position Weight
9 PW Simulator - 10 Smartpricing - 11 SP Simulator - 12 Adsense Simulator
The Adsense Reports contain a couple of very important statistics: eCPM and Earnings.
Most people use eCPM as a way of measuring the performance of their ads, because it is a useful indicator of the rate of income, irrespective of the number of page impressions you actually receive.
We will be using both eCPM and Earnings in the Adsense Simulator (at the end of this course) to assess the relative performance of different ad positions. This is because, although it is useful, eCPM does have some limitations, as can be seen in the following example. Suppose you have a site that has:
- An index/landing page, where your visitors enter your site
- 1 other page
- You receive 500 visitors on average per day, but it varies greatly day by day.
- On average, half of those visitors are interested in your second page, a proportion which is fairly constant.
Day 1
First you put a tower on your 'other page' and you get an eCPM of $40.00. The statistics for the day are:
| Page impressions | Clicks | Page CTR | Page eCPM | Earnings | |
| Adsense for Content | 250 | 50 | 20.00% | $40.00 | $10.00 |
Day 2
The next day you add a tower to your index page, and your eCPM drops and your earnings drop, despite getting more impressions. The statistics for the second day are:
| Page impressions | Clicks | Page CTR | Page eCPM | Earnings | |
| Adsense for Content | 300 | 50 | 16.67% | $23.33 | $7.00 |
What do these statistics suggest? You added a tower to your index page and the earnings and eCPM both dropped! So, should you remove the tower from your index page? Is it dragging the earnings of your site down?
The answer to both of these latter questions is "No". Your earnings dropped on day 2 because you had fewer visitors - only 200, compared with 500 the day before.
On day 1 you were only showing ads on the 'other page', and you had 250 impressions. That suggests you had 500 readers of the index page, because half your visitors go from the index page to the other page.
On day 2 you were showing ads on both pages. So, if you had 300 page impressions, that was probably 200 impressions of the index page and 100 impressions of the other page. That is, you had 200 visitors. If you had had 500 visitors, you would have earned around $17.50.
This could be seen more clearly by using 'channels' and measuring the performance of the two pages separately. If you use channels in this example, on a day when you get 500 visitors you will have the following statistics:
| Page impressions | Clicks | Page CTR | Page eCPM | Earnings | |
| Index Page | 500 | 75 | 15.00% | $15.00 | $7.50 |
| Other Page | 250 | 50 | 20.00% | $40.00 | $10.00 |
| TOTAL | 750 | 125 | 16.67% | $23.33 | $17.50 |
Although the index page performs moderately by comparison with the second page, it nevertheless adds to your income. So, although having ads on the index page brings down overall eCPM for your site, it also increases your overall earnings.
What this illustrates is that care needs to be taken when using statistics to make decisions. You need to use the right statistics for the right purpose, and understand what those statistics mean. eCPM is useful in some analyses but not in others. eCPM can be a useful statistic to compare different ad placements on a single page, but not to make site-wide decisions on whether to place ads on a page, or to remove them.