In simple words, effective cost per thousand impressions (eCPM) is that amount you can expect to earn online for every 1000 impressions shown on your site. In other words, this amount will be payable by your advertiser for showing his ads in your website. Many advertising companies like AdSense, yahoo ads and chitika ads companies have different rules to calculate this cost. Because it affects directly to the online publisher's earning, so, we should know different factors which affects it.
Factors Affecting eCPM
1st Factor of eCPM : Nature of Product or Service
Advertising company decides different ads different eCPM. Suppose, if you are writing content relating to Gold, your eCPM will high than the content of food products of Cat.
2nd Factor of eCPM : Source and Quantity of Online Traffic
If you are international source of online traffic, eCPM will high instead of local online traffic. No. of page impressions will also affect eCPM. Page impressions are different from site visitor. A single visitor may visit more than 10 to 20 pages. If bounce rate is 50%, then 500 visitors will decide your site's ads cost because 500 visitors will views 1000 pages. So, more visits and more page impression means more eCPM and more online earning.
Mathew Carpenter Arevalo explained its factors in simple words in following video: