What is RPM Advertising

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.

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• 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.

RPM is a commonly used number in advertising programs, and you may find it helpful for comparing revenue across different channels.

How Does Revenue Share to Publisher, 

Stands for "Revenue Per 1,000 Impressions." RPM is similar to CPM, but measures the revenue from 1,000 ads impressions instead of the cost of the ads. Therefore, while CPM is typically measured by advertisers, RPM is monitored by publishers.

For example, a publisher has a website that gets 5,000 page views each day. If the advertisements on the website generate a total of $25.00 of daily revenue, the website has an RPM of $5.00 ($25 ? 5). Web publishers use RPM as a way of measuring how effective advertisements are at generating revenue. If certain advertisements generate a low RPM, publishers will likely switch to different ads that provide higher RPM rates and higher revenue. RPM is not only used in online advertising, but is measured in several other types of advertising mediums as well.

Though it somewhat confusing, RPM and CPM are often interchangeably. While CPM stands for "Cost Per 1,000 Impressions," it is commonly used synonymously with RPM to describe the average revenue from the publisher's perspective.