RPM vs. CPM: Should publishers focus on RPM or CPM?

Monetization Tips & Guides
October 11, 2021 | by Kean Graham
rpm_vs_cpm

RPM and CPM are often two metrics that confuse new publishers. While they can both be used to determine your site’s monetization performance, there are key distinctions between the two.

CPM is the amount that advertisers are willing to pay for 1000 impressions. RPM, on the other hand, is the total amount of ad revenue a publisher is set to earn per 1000 pageviews.

The main question, however, is what’s the most effective metric for publishers to use when it comes to gauging their earning performance. Should the focus really be on RPM rather than CPM?

First, let’s start with the basics of what these two metrics are.

What Is CPM?

cost_per_mile_CPM

 

CPM or Cost Per Mille is the cost for every 1000 impressions that advertisers interested in your inventory are willing to pay. Almost everyone in the digital marketing industry will be familiar with what CPMs are. However, this is generally considered as an advertiser-side metric since it’s effective in tracking expenses for campaigns.

To calculate CPM, use the following formula:

CPM = (Cost of the campaign / Number of impressions) * 1000

With ads based on a CPM model, the publisher earns every time the ad serves. It should be noted, however, that every site will have varying CPM performance.

This is because multiple factors can affect CPM, such as device, geo, vertical, advertisers’ budgets, and ad viewability.

Related Read: https://www.monetizemore.com/blog/cpm-vs-ecpm/

 

What Is RPM?

rpm_revenue_per_mile

RPM or Revenue Per Mille is defined as the cost for every 1000 pageviews. It’s an effective indicator of what a publisher is making from their site’s total traffic.

It’s considered as a publisher metric because unlike CPM, RPM takes into account a site’s page views and doesn’t rely on ad impressions alone.RPM also takes into account all of the ads on your site’s pages.

For example, you’ll generally have a higher RPM if you have three ads on your pages than if you only had one.

Here’s the formula to calculate RPM:

RPM = (Estimated earning / Number of pageviews) * 1000

Related Read: https://www.monetizemore.com/blog/what-is-rpm-session-page-ad/

 

RPM vs CPM

 

RPM

CPM

 

also known as Revenue Per Mile

 

 

also known as Cost Per Mile

 

RPM’s various modes:

1. Impression RPM

2. Ad RPM

3. Page RPM

4. Ad-Request RPM

CPM’s two modes:

1. CPM

2. eCPM

eCPM=CPC*CTR*1000) 

(eCPM metrics basically evaluates your AdSense paycheck)

 

Google AdSense enlightened RPMs

 

 

CPM is well-known because of header bidding

 

 

Calculates publisher’s total ad revenue

 

 

Calculates advertiser’s cost price

 

                                                           Table 1: RPM vs CPM

 

Conclusion

While there is no right or wrong answer, focusing on RPM is more beneficial to publishers compared to CPM. It’s a more holistic metric to measure your site’s revenue performance, showing you how well you’re earning after considering all your revenue streams and traffic.

When testing new strategies and optimization techniques, it’s better to focus more on your site’s overall RPM per page or per session.

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