For an ad entering an auction on the Display Network, the AdWords system will calculate the effective cost–per–thousand impressions (eCPM) when there are:
- only cost-per-click (CPC) ads entering the auction
- both cost-per-click (CPC) and cost-per-acquisition (CPA) ads entering the auction
- only viewable cost-per-thousand impressions (vCPM) ads entering the auction
- any cost-per-click (CPC) or cost-per-acquisition (CPA) ads entering the auction
The Effective CPM (eCPM) is a metric used in Google Adwords to compare CPC and CPM ads compiting for the same place in a bid. This way, each ad is positioned with the same criteria: Effective CPM. It needs to be calculated only for CPC ads, since CPM ads are stil bidding with that metric.
Actually the given answers are creating confusion. A definition of ecpm is created if CPC and vCPM ads compete for the same Display Network Placement. But, in the given answers, vCPM is missing and CPA is being questioned instead.
“To keep things fair, when CPC and vCPM ads compete for the same Display Network placement, the two types of ads are compared apples-to-apples on how much they’re effectively willing to pay for the impression. With a vCPM ad, the max viewable CPM bid represents how much the advertiser is willing to pay for each 1,000 viewable impressions; with a CPC ad, Google estimates how many clicks the ad might receive in 1,000 impressions to get the comparison.”
Read more here: https://support.google.com/adwords/answer/2630842?hl=en