Effective Cost Per Mille or eCPM (as it is often initialized to) is a phrase often used in online advertising and online marketing circles. It means the cost of every 1,000 ad impressions shown.

CPM is considered the optimal form of selling online advertising from the publisher’s point of view. A publisher gets paid every time an ad is shown.

eCPM is used to measure the effectiveness of a publisher’s inventory being sold (by the publisher) via a CPA, CPC, or CPT basis. In other words, the eCPM tells the publisher what they would have received if they sold the advertising inventory on a CPM basis (instead of a CPA, CPC, or CPT basis).

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Cost per Thousand (known as CPM) is used in marketing as a benchmark to calculate the relative cost of an advertising campaign or an ad message in a given medium. Rather than an absolute cost, CPM estimates the cost per 1000 views of the ad.

It is calculated by:

total cost * 1000 / total audience

For example, while the Super Bowl has the highest per-spot ad cost in the United States, it also has the most television viewers annually. Consequently, its CPM may be comparable to a less expensive spot aired during standard programming.

The “M” in CPM derives from the Latin mille for “thousand.”

In the United Kingdom, Cost Per Thousand is expressed as CPT rather than CPM.

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Cost Per Impression is a phrase often used in online advertising and marketing related to web traffic. It is used for measuring the worth and cost of a specific e-marketing campaign. This technique is applied with web banners, text links, e-mail spam, and opt-in e-mail advertising. (Although opt-in e-mail advertising is more commonly charged on a CPA basis.)

The Cost Per Impression is often measured using the CPM (Cost Per Mille) metric. (A CPM is the cost of one thousand (1,000) impressions.)

CPM is considered the optimal form of selling online advertising from the publisher’s point of view. A publisher gets paid for each ad that is shown.

This type of advertising arrangement closely resembles Television and Print Advertising Methods for speculating the cost of an Advertisement. With Television the Nielsen Ratings are used and Print is based on how many readers a publication has. For a Website the numbers are a bit more exact due to the TCP/IP nature of the Internet.

CPM and/or Flat rate advertising deals are preferred by the Publisher/Webmaster because they will get paid regardless of any action taken.

For Advertisers a Performance Based system is preferred. There are two methods for Paying for Performance: 1) CPA – Cost per Action/Acquisition and 2) CPC – Cost per Click Through.

Today, it is very common for large publishers to charge for most of their advertising inventory on a CPM or CPT basis.

A related term, eCPM or effective Cost Per Mille, is used to measure the effectiveness of advertising inventory sold (by the publisher) via a CPC, CPA, or CPT basis.

Cost Per Mille

The initialization CPM comes from print world (and is a latin word), and stands for Cost Per Mille in the US or, more correctly, in the UK Cost Per M, with M representing the Roman numeral for thousand. When online advertising started gaining momentum, those in the industry used this term (rather than something like CPI) as a metric for describing the Cost Per Impression largely because advertisers were already familiar with the term CPM.

It is important to remember that when someone says something like, “our CPM is $5″. That this means that the Cost Per Impressions is $0.005 — half a cent.

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Litigation

Disputes over the issue have resulted in a number of lawsuits. In one case, Google (acting as both an advertiser and advertising network) won a lawsuit against a Texas company called Auction Experts (acting as a publisher), which Google accused of paying people to click on ads that appeared on Auction Experts’ site, costing advertisers $50,000[1]. Despite networks’ efforts to stop it, publishers are suspicious of the motives of the advertising networks, because the advertising network receives money for each click, even if it is fraudulent.

Solutions

Proving click fraud can be very difficult, since it is hard to know who is behind a computer and what their intentions are. Often, the best an advertising network can do is to identify which clicks are most likely fraudulent, and not charge the account of the advertiser. Ever more sophisticated means of detection are used, but none are foolproof.

The pay-per-click industry is lobbying for tighter laws on the issue. Many hope to have laws that will cover those not bound by contracts.

A number of companies are developing viable solutions for click fraud identification and are developing intermediary relationships with advertising networks. Such solutions fall into two categories:

a) Forensic analysis of advertisers’ web server log files

This analysis of the advertiser’s web server data requires an in-depth look at the source and behavior of the traffic. As industry standard log files are used for the analysis, the data is verifiable by advertising networks.

b) Third-party corroboration

Third parties offer web-based solutions that might involve placement of single-pixel images or Javascript on the advertiser’s web pages and suitable tagging of the ads. The visitor may be presented with a cookie. Visitor information is then collected in a third-party data store and made available for download. The better offerings make it easy to highlight suspicious clicks and they show the reasons for such a conclusion. Since an advertiser’s log files can be tampered with, their accompaniment with corroborating data from a third party forms a more convincing body of evidence to present to the advertising network.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Click fraud can be as simple as one person starting a small web site, becoming a publisher of ads, and clicking on those ads to generate revenue. Oftentimes, the number of clicks, and their value, is so small, that the fraud goes undetected. Oftentimes publishers will claim small amounts of such clicking is an accident, which is often the case.

Much larger scale fraud also occurs. Those engaged in large scale fraud will often run scripts, which simulate a human clicking on ads in web pages. However, huge numbers of clicks appearing to come from just one, or a small number, of computers, or single geographic area, look highly suspicious to the advertising network and advertisers. Clicks coming from a computer known to be that of a publisher, also look suspicious to those watching for click fraud. A person attempting large scale fraud, alone in their home, stands a good chance of being caught.

Organized crime can handle this by having many computers, with their own internet connection, in different geographic locations. Often scripts fail to mimic true human behavior, so organized crime networks use Trojan code to turn the average person’s machines into zombie computers and using sporadic redirects or DNS-cache-poisoning to turn the oblivious user’s actions into actions generating revenue for the scammer.

Impression fraud is an insidious variant of click fraud where the advertiser is penalized for having an unacceptably low click-through rate for a given keyword. This involves making numerous searches for a keyword but without clicking of the ad. Such keywords are disabled automatically, enabling a competitor’s lower-bid ad for the same keyword to continue while several high bidders (on the first page of the search results) have been eliminated.

It is very difficult for advertisers, advertising networks, and authorities to pursue cases against networks of people spread around multiple countries.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

A secondary source of click fraud is non-contracting parties, who are not part of any pay-per-click agreement. This type of fraud is even harder to police because perpetrators generally can not be sued for breach of contract, or charged criminally with fraud. Examples of non-contracting parties are:

• Competitors of advertisers: These parties may wish to harm a competitor who advertises in the same market by clicking on their ads. The perpetrators don’t profit directly, but force advertiser to pay for irrelevant clicks, thus weakening or eliminating a source of competition.
• Competitors of publishers: These persons may wish to frame a publisher. It is made to look like the publisher is clicking on their own ads. The advertising network may then terminate the relationship. Many publishers rely exclusively on revenue from advertising, and can be put out of business by such an attack.
• Other malicious intent: As with vandalism, there’s an array of motives for wishing to cause harm to either an advertiser or a publisher, even by people who have nothing to gain financially. Motives include political and personal vendettas. These cases are often the hardest to deal with, since it is hard to track down the culprit, and if found, there is little legal action that can be taken against them.
• Unwanted “friends” of the publisher: Sometimes upon learning a publisher profits from ads being clicked, a supporter of the publisher (like a fan, family member, or personal friend), will click on the ads, to “help”. However, this can backfire when the publisher (not the “friend”) is accused of click fraud.

Advertising networks try to stop fraud by all parties, but often do not know which clicks are legitimate. Unlike fraud committed by the publisher, it is hard to know who should pay when past click fraud is found. Publishers resent having to pay refunds for something that is not their fault. However, advertisers are adamant that they should not have to pay for phony clicks.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Click fraud occurs in pay per click online advertising when a person, automated script or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating an improper charge per click. Click fraud is the subject of some controversy and increasing litigation due to the advertising networks being a key beneficiary of the fraud whether they like it or not.

Use of a computer to commit this type of fraud is a felony in many jurisdictions, for example as covered by Penal code 502 in California and the Computer Misuse Act 1990 in the United Kingdom. There have been arrests relating to click fraud with regard to malicious clicking in order to deplete a competitor’s advertising budget.

In 2004, a California man created a software program that he claimed could let spammers defraud Google out of millions of dollars in fraudulent clicks. Authorities said he was arrested while trying to blackmail Google for $150,000 to hand over the program.

Links

• “Web start-ups vie to detect ‘click fraud’.” Wall Street Journal Online. Retrieved June 10, 2005.
• “Vendors release click-fraud detection tools.” eWeek. Retrieved March 4, 2005.
• “Click fraud roils search advertisers.” C|Net News.com. Retrieved March 4, 2005.
• “Mice Attack: Internet scammers steal money with ‘click fraud’.” Newsweek. Retrieved January 18, 2005.
• “Google CFO: Fraud a Big Threat.” CNN Money. Retrieved December 2, 2004.
• “Click fraud threatens web.” Wired News. Retrieved October 13, 2004.
• “How Click Fraud Could Swallow the Internet.” Wired Magazine, issue 14.01 (January 2006). Retrieved December 29, 2005.
• “Click fraud fears growing for online advertisers.” Times Online. Retrieved February 2006

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Googletestad appears to stand for Google’s Test Ad which is used for live testing of their AdWords and AdSense pay-per-click (PPC) advertising system.

At the moment there are no define: googletestad definitions in Google’s database for this keyword.

The Google Test Ad

The following paid advertisement appears for a Google search on googletestad:

Popularity of googletestad as a Search Term

In June 2005, googletestad began appearing increasingly in the top search terms for search engines such as Yahoo! Search Marketing. and WordTracker.

In July 2005 this keyword was consistently in the top 30 searches as measured by WordTracker, and received over 100,000 searches according to Yahoo! Search Marketing thus:

• 72,161 searches – google googletestad monitor query
• 39,436 searches – googletestad
• 96 searches – foo google googletestad monitor query

The WordTracker Keywords Report dated August 9, 2005 (top 10 queries from the last 48 hours) reported:

• 1 jessica simpson (3377)
• 2 jessica alba (3314)
• 3 music lyrics (2679)
• 4 daniela hantuchova (1955)
• 5 paris hilton (1469)
• 6 playstation 2 cheats (1243)
• 7 xbox cheats (1231)
• 8 jokes (1069)
• 9 googletestad (1048)
• 10 google (1013)

Regarding the keyword’s trend, back issues of that service’s Top 200 long-term keyword report (for the last 110 days) showed gaining popularity:

(date – rank, and count)

• August 9, 2005 – 55 (35,032)
• August 2, 2005 – 64 (32,737)
• July 26, 2005 – 94 (28,793)
• July 19, 2005 – 105 (24,878)

As of August 13th 2005, there were 12,800 hits found for googletestad in Google’s search engine.

Links

• Official Website
• Program Details and FAQ

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Each time a visitor visits a page with an AdSense tag, a piece of JavaScript writes an iframe tag, whose src attribute includes the URL of the page. Google’s servers use a cache of the page for the URL or the keywords in the URL itself to determine a set of high-value keywords. (Some of the details are described in the AdSense patent.) If keywords have been cached already, ads are served for those keywords based on the AdWords bidding system.

The storage requirements of an AdSense system are stunningly modest. If each URL has just 8 “high-value” keywords, each represented by a single 32-bit number, then the keywords for each URL could be represented with just 32 bytes. The high value keywords of 4 billion URLs could be stored in 128GB, which would cost only $100 (circa 2006). 400 billion URLs or 100 drives (for a redundancy of 100) would require only $10,000 in storage costs.

AdSense serves a very large number of pages each day. If each day around 1B people saw 10 AdSense impressions (or 100M people saw 100 AdSense impressions), then AdSense would serve around 10B requests/day, or 115,741 requests/sec. If one machine can serve 20 reqs/second (seek times to read a random 4096-byte location on a drive allow for bursts of well over 100 reqs/second), then Google would require 5,787 servers to serve these 10B reqs/day. If each of these servers were hosted at a cost of $100/month, then it would cost $579K/month to run the adservers needed.

Suppose these 10B impressions/day generated clicks at a clickthrough rate of .3% and an average CPC of $.10. Then each day Google would receive 30M clicks/day (347 clicks/sec), generating $3M/day ($34.77/sec), or 900M clicks/month, generating $90M/month.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.