What is RPM (Session, Page and Ad RPM)

AdTech Industry Definitions
Last updated: February 21, 2024 | by Aleesha Jacob
what-is-rpm

This post was most recently updated on February 21st, 2024

There are several key metrics that publishers and advertisers use to measure performance and optimize their strategies. One such metric is RPM, or revenue per thousand impressions. RPM measures how much revenue a publisher generates for every thousand ad impressions served on their website or app. It’s an important metric because it can help publishers understand the effectiveness of their ad inventory and make informed decisions about ad placement, format, and targeting.

RPM allows publishers to track and optimize revenue, which is the lifeblood of their business. By understanding how much revenue they’re generating for each ad impression, publishers can make informed decisions about which ads to serve and where to place them, ultimately maximizing revenue and delivering a better user experience for their audience. Additionally, advertisers can use RPM data to evaluate the effectiveness of their campaigns and make adjustments to improve performance.

By understanding how RPM works and how it can be optimized, businesses can drive more revenue, improve user experience, and ultimately achieve their advertising goals.

Also, find out more about the difference between page views and impressions here:

https://www.monetizemore.com/blog/google-analytics-pageview-vs-ad-manager-impressions/

 

RPM

RPM is a common metric that most advertising platforms such as ad networks and ad servers use. It represents the cost the advertiser will pay for every 1,000 ad impressions served on a publisher’s website.

To calculate the RPM, we need to divide the Revenue by Ad Impressions and multiply it by 1,000 using the formula below.

RPM = ( Revenue / Impressions ) x 1,000

Let’s say we want to calculate the RPM for Oct 18, 2018. The site earned an estimated $133.04 for 104,752 ad impressions.

RPM = ( 133.04 ÷ 104,752 ) x 1,000

RPM = $1.27

This indicates that for every 1,000 ad impressions served on a publisher’s website they earn $1.27.

From a publisher’s point of view, this is a good metric to look at, but not the best to define a site’s performance. There’s a big possibility that even if the RPM increases, the overall site revenue could be inversely proportional to it.

However, since RPM is the total amount of all CPMs on a specific page, it’s a good performance indicator for different ad types on a page.

Page RPM

The page RPM metric helps publishers understand the performance of their ads on a page level. This way, you can identify low-earning pages and strategize how to improve their performance.

Page RPM is the rate the advertiser pays for every 1,000 ad impressions viewed per page. You can calculate RPM by dividing your estimated earnings by the number of page views and then multiply it by 1,000.

Page RPM = ( Revenue / Number of page views) x 1,000

To better understand it, let’s calculate the page RPM for Oct 22, 2018.

Estimated earnings = CA$191.93

Page views = 419,470

Page RPM = ( 191.93 ÷ 419,470 ) x 1,000

Page RPM = CA$ 0.46

For every 1000 impressions this particular page of the publisher’s website received, they earned $0.46 in ad revenue.

Page RPM is an excellent comparative metric to evaluate multiple page performance on your website. It gives you an appreciation of what’s going on with your pages regarding revenue at any comparable period, page to page, etc.

Take note that an increase in page RPM results in an increase in the total revenue of the website.

Session RPM

Out of the three metrics we covered here, session RPM is the best metric to reference when analyzing overall site performance. This metric directly shows a site’s ad earnings per visitor. It also gives you a better understanding of which landing pages gain revenue the most.

To calculate session RPM, divide your earnings by visitor sessions and then multiply them by 1,000, corresponding to one thousand website visits.

Session RPM = ( Revenue / Number of ad sessions) x 1,000

Let’s say we want to calculate the Session RPM for Oct 20, 2018. 54,403 ad sessions generated $120.68 in estimated earnings.

Session RPM = ( 120.68 ÷ 54,403) x 1,000

Session RPM = $2.22

Best Practices for Maximizing RPM

Follow these practices and never complain after that:

  1. Optimize Ad Placement and Format: Ad placement and format are critical factors that can impact RPM. Publishers should experiment with different ad placements and formats to find the best combinations that generate the highest RPM. For example, placing ads above the fold, in content, or in sticky positions tends to generate higher RPMs than other ad placements. Similarly, using ad formats such as native ads or video ads can often result in higher RPMs than traditional display ads.
  2. Target the Right Audience: Advertisers are often willing to pay more to reach a highly targeted audience. By using data and analytics to understand their audience’s demographics, interests, and behavior, publishers can optimize their ad inventory to target the most valuable users. This can help drive higher engagement rates, click-through rates, and, ultimately higher RPMs.
  3. Monitor Ad Performance: Publishers should regularly monitor their ad performance and adjust their strategies accordingly. By tracking key metrics such as click-through rates, viewability, and engagement rates, publishers can identify underperforming areas of their ad inventory and take corrective action. This can include removing underperforming ads, experimenting with different ad formats and placements, and adjusting pricing strategies.
  4. Optimize Page Load Times: Slow page load times can negatively impact user experience and lead to lower RPMs. Publishers should optimize their website or app’s performance by compressing images, minimizing page redirects, and using a content delivery network (CDN) to serve content faster.
  5. Use Header Bidding: Header bidding is a programmatic advertising technique that allows publishers to offer their ad inventory to multiple ad exchanges simultaneously, resulting in higher bids and increased competition for ad space. By implementing header bidding, publishers can increase their RPMs and generate more revenue from their ad inventory.

Conclusion

Each metric we covered here has its use in monitoring site performance. If you want to check the performance of different ad types on a page, then you may utilize the RPM metric.

If you want to evaluate your site performance at the page level, use page RPM. If you will assess your site’s overall performance, use the session RPM metric.

With all the metrics discussed, session RPM is the best parameter that allows publishers to gauge the overall performance of a site. This metric shows how well or how good a site’s ad earnings are per visitor.

If you want to take your ad earnings to the next level, why not let the experts help? MonetizeMore is a Google Certified Publisher Partner, and our team of ad optimization specialists is standing by, ready to assist you in maximizing your ad revenue. Sign up for a Starter account at MonetizeMore today!

Related Reads

Ad RPM vs Page RPM

RPM vs CPM

Get the RPM results you want

RPM vs Session RPMs

Best ways to increase Page RPMs

FAQ

What is the difference between RPM and CPM?

CPM stands for cost per thousand impressions and is a metric used by advertisers to measure the cost of serving ads. RPM, on the other hand, measures the revenue generated by publishers for every thousand ad impressions served. In other words, CPM is a cost metric, while RPM is a revenue metric.

How is RPM calculated for different ad formats?

RPM can be calculated for any ad format by dividing the total revenue generated by the number of ad impressions served, then multiplying by 1000. For example, to calculate RPM for video ads, you would divide the total revenue generated by the number of video ad impressions served, then multiply by 1000.

What factors affect RPM?

In addition to ad placement and user engagement, other factors that can impact RPM include the quality of the ad inventory, the demographics and behavior of the target audience, the type of ad format and creative used, and the overall demand for ad space.

How can publishers increase their RPM?

In addition to optimizing ad placement and format, publishers can increase their RPM by focusing on audience targeting, implementing header bidding, using data and analytics to understand their audience, and experimenting with different pricing strategies. Additionally, publishers should regularly monitor their ad performance and make adjustments to optimize their RPM over time.

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