Difference Between RPM and CPM,Usually RPM or Revenue per thousand impressions, Revenue Per Mille - (Mille means “thousand” in Latin. Basically “Revenue per 1000 impressions” of a webpage. It’s much easier to think of it as a Page Rate. Clearly if you have 4 ads on a webpage your RPM will be higher than if you just have 2. RPM doesn’t represent how much you have actually earned; rather, it’s calculated by dividing your estimated earnings by the number of page views, impressions, or queries you received, then multiplying by 1000. RPM Rate = (Estimated earnings / Number of page views) * 1000.
RPM Publishers,Usually publisher’s language and they find out how their web property is performing. Page views keep changing but RPM for a website in a specific industry and with a specific audience fairly remains constant over a period of 6 months to a year. A health niche website may have a higher RPM and a cine gossip entertainment website may have a relatively low RPM compared to the health website.
RPM Standard Calculation,The publisher may charge the advertiser on clicks basis but still can measure the effectiveness of each ad campaign on RPM.
Revenue Per Mille Calculation Overview,
Advertiser A pays $1 per click. On running the ad, it generated 25 clicks on 20,000 page views. It means that for 20,000 page views, the publisher earned $25 (25 clicks x $1 per click). The RPM would be:
($25/20,000) x 1000 = $1.25 Advertiser B pays $2 per click. On running the ad, it generated 15 clicks on 25,000 page views. Total earnings is now $30.
($30/25,000) x 1000 = $1.20 In the above example we can easily make out that Advertiser A performs better because the RPM is higher!.
How to Use the RPM Advertising,
- As a publisher, you should always try to increase your RPM every quarter. This makes your web property more valuable. If your current RPM is $2, set a target of $2.50 and find out opportunities to recruit advertisers. This is the CPM rate you should present to the advertisers and sell your ad inventory by communicating the benefits of advertising in your web content property.
- If you earned an estimated $0.15 from 25 page views, then your page RPM would equal ($0.15 / 25) * 1000, or $6.00.
- If you earned an estimated $180 from 45,000 ad impressions, your ad RPM would equal ($180 / 45,000) * 1000, or $4.00.