For an ad entering into an auction on the Google Display Network, the AdWords system will calculate the effective cost-per-thousand impressions (eCPM) when there are:

For an ad entering into an auction on the Google Display Network, the AdWords system will calculate the effective cost-per-thousand impressions (eCPM) when there are:

  • both cost-per-click (CPC) and cost-per-acquisition (CPA) ads entering the auction
  • only cost-per-click (CPC) ads entering the auction
  • only cost-per-thousand impressions (CPM) ads entering the auction
  • any cost-per-click (CPC) or cost-per-acquisition (CPA) ads entering the auction

The correct Answer is:

  • any cost-per-click (CPC) or cost-per-acquisition (CPA) ads entering the auction

Explanation: 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