Here is an example that illustrates the difference between CPM and eCPM:
Gizmo Galaxy buys one million impressions for $3,000.00 on Network A. The company’s CPM is $3.00. Simple and straightforward. Also, not very helpful.
It turns out that Network A was fine-tuning the campaign at the beginning and delivered an extra 200,000 impressions (a.k.a. bonus impressions). So Gizmo Galaxy actually got 1.2 million views for its $3,000.00 media buy. Using the eCPM formula, Gizmo Galaxy’s Director of Marketing can see that the real cost was $2.50 per thousand impressions. This is a more meaningful number upon which to base future ad purchasing decisions than CPM would be.
As a test, Gizmo Galaxy ran a separate campaign on Network B under the same criteria: one million impressions at a $3.00 CPM. At the end of the campaign, the network had delivered exactly one million impressions. Since there were not any bonus impressions, the eCPM was $3.00.