What does eCPM mean on my Google AdSense report?

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Dave's Answer:

First off, let me say that you have good numbers there! An effective click-thru rate (CTR) of 2.81% is good for Google AdSense, actually, and what's even better is that the keywords that are matching your content are valuable too, which is what you see with the eCPM figure.

Now, let's talk about how this is all calculated.

Much of this is pretty straightforward, to be fair. Page impressions is the number of times that Google showed an AdSense advert on your page or site. In this instance, you displayed an even 2600 adverts over whatever time period you're summarizing. Clicks is the number of times people clicked on these ads, and your click-thru rate is calculated thusly:
CTR = Page impressions / Clicks

Since much of the actual valuation data is hidden by Google even to you as a publisher, the only other actual figure shown here is the net value of those 73 clicks: $35.86. How do they calculate the effective CPM value? Again, a formula:
eCPM = (Earnings / Page Impressions) * 1000

In your case, your earnings are 35.86 and your page impressions are 2600, so you can do the math and come up with the $13.79 eCPM yourself too.

The problem is that the value of your page and your keywords varies over time. Some times the ads on your page might be worth $X per click, while the very same advert at 3am, or a week later, might be worth 1/10th $X, or worse. On my own AdSense reports I see the eCPM fluctuate rather dramatically from a high of over $17 to a lower of about $7.

This means that as a basis for you calculating the CPM for competing ads on your pages, it needs to be taken with a grain of salt. Perhaps the fairest strategy would simply be to average out your eCPM over a few weeks and use that running average, or, to be profitable, 10% more than that running average, as your advertising rate for other ads.

Two additional thoughts: first, be careful that your own ads don't look too similar to AdSense blocks, because that can get you in trouble with Google. Second, realize that if you are indeed calculating on a CPM basis, that means you'll need to be providing traffic reports to your advertisers, which might be more trouble than it's worth. Instead, I suggest you consider having a flat monthly ad rate based on CPM and your average monthly page views.

Hope that helps clear things up with Google AdSense!