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?
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 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 |
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also known as Revenue Per Mile
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also known as Cost Per Mile
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RPM’s various modes: 1. Impression RPM |
CPM’s two modes: 1. CPM eCPM=CPC*CTR*1000) (eCPM metrics basically evaluates your AdSense paycheck) |
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Google AdSense enlightened RPMs
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CPM is well-known because of header bidding
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Calculates publisher’s total ad revenue
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Calculates advertiser’s cost price
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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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