If you monetize your content with digital ads, you’ve come around various analytic metrics. The advertising industry is full of abbreviations hiding more and less crucial factors for ad revenue analysis. Even though they might seem basic, some of those are often misunderstood or just not adequately considered. We already elaborated on CPM and eCPM, so this time let’s explore the third of the most fundamental ones – RPM.
RPM – Revenue Per Mille (thousand)
Let’s look closer into the commonly used page RPM. It’s calculated on the basis of page views and earnings, and the quotient is multiplied by 1000.
Formula:
RPM = (earnings/page views) x 1000
RPM represents page earnings from 1000 page views and indicates how much money your website makes with placements in use. Proper page’s RPM analysis exposes low inventory coverage issues; therefore, it’s an excellent insight for optimization. Publishers often experience high CPMs, but low RPMs, which confuses them because technically, when advertisers pay a favorable rate, they expect ad revenue to reflect that. Such discrepancy signals that it’s time to optimize!
However, from a reporting point of view, it’s usually considered for estimating purposes. Since it relies simply on page views, it doesn’t take into account factors such as ad viewability, which is also an important metric to monitor regarding ads performance and incomes obtained from them. Just because your page was rendered doesn’t necessarily equal advertisement to be seen by a user. And that impacts bidding rates, hence directly influences your earnings.
Use RPM to grow
Low RPM of the page values point out that ad space potential isn’t exploited enough, and it might be good to rethink the ad layout in use and maybe implement some more ad units. So, for publishers looking to inspect the true value of their ad inventory RPM is the metric to follow.
RPM is appointed with page views extracted from publishers’ Google Analytics account, and along with CPM is one of the most critical metrics in revenue analysis. Although it’s less common than CPM, it actually holds more publisher-oriented insights. Many monetization solution providers use it to inspect the general performance of websites they cooperate with and often share that knowledge via designated tools. And that’s another element to provide you with the most valid information for your business 😉
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