What is Effective Cost Per Mille (eCPM)

Theres a common confusion among webmasters regarding eCPM. I have tried here to discuss about the eCPM. Whats its usage and How its calculated.

Mille, a Latin word which stands for 1000. The basic definition of eCPM is the effective earnings for by showing CPM ads on your site for 1000 impressions. Its nothing solid and just used to calculate how much is your average earning for thousand impressions of ad units.

Let’s say, If you have earned $25 in total (Including earnings from clicks and impressions) with 10000 impressions, then your eCPM will be ($25/10000)x1000=$2.5. Yeah, its that easy.
Now, let us make a back calculation. This might be easier to understand. say, your eCPM is $1.50 and your page (ad block) impressions are 7500, your earnings should be $11.25.