Which metric calculates the effective cost of ad inventory based on impressions shown?

The metric that calculates the effective cost of ad inventory based on impressions shown is known as eCPM, or effective Cost Per Mille. This metric provides a standardized way to evaluate the revenue generated per thousand impressions, allowing marketers and advertisers to compare the cost-effectiveness of various advertising campaigns regardless of their specific payment structures.

eCPM takes into account different pricing models such as cost per click (CPC) and cost per action (CPA) and converts them into a cost-per-thousand-impressions format. This means that if an advertiser is looking to evaluate the performance of ad inventory based on how many times their ad was viewed rather than clicked, eCPM is the ideal measure. By using eCPM, advertisers can assess the yield on their advertising investments, facilitating better budgeting and strategic decision-making in their campaigns.

Understanding eCPM is also critical for effective advertising planning, as it allows for easier comparison between campaigns that may use different pricing structures, ensuring that advertisers can allocate their budgets more effectively to maximize ad reach and effectiveness.