RPM vs CPM: What’s the Difference?
Comparing Apples and Oranges
RPM rate vs CPM rate
Many Publishers considering running House Ads on their site have run, or are running Google Adsense. Unlike nearly every other ad network in the world, Google Adsense’s default reporting metric is RPM rate which, in turn creates a level of confusion with Publishers. Most Publishers don’t realize that RPM rate is a page-based rate and CPM rate is an ad unit rate.
What is RPM rate?
RPM is an acronym for Revenue Per Mille (mille means “thousand” in Latin) which is basically “revenue per 1000 impressions” of a web page. If you have 4 ads on a page 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 pageviews, impressions, or queries you received, then multiplying by 1000.
RPM rate = (Estimated earnings / Number of page views) * 1000
What is CPM rate?
CPM is an acronym for Cost Per Mille (mille means “thousand” in Latin) and is an ad unit rate. It is the price advertisers pay to have their ad shown 1,000 times. It is reported as an actual rate for advertising and is the common unit for the pricing ads online.
Why does Google report RPM and not CPM?
Google can be a bit misleading; just try and locate a CPM report within the Adsense Portal! As a rough rule, RPM will always be higher than CPM because it’s an aggregate of all the ad units on a page. Let’s say you have a RPM rate of $4.00 from an ad provider. If you only have 2 units, then the CPM per unit will be $2.00. Remove the units of measurement (i.e. RPM or CPM) and $4 is always going to sound better than $2 right?
The other reason that Google reports to Publishers on a RPM basis and not CPM is they don’t actually sell all their ads on a CPM rate. Most Google Ads are sold on a CPC rate (Cost Per Click) some are CPA (Cost Per Acquisition), both of which put all the risk on the Publisher to maximize advertising performance. So, if you run Google Ads and don’t get a click, you won’t earn any revenue. Not really fair, is it?
House Ads’ CPM rates for Publishers
House Ads prices CPM at the ad unit level and we sell ads on a CPM basis to our advertisers and their agencies. We think of your website like a billboard with an audience of house buying consumers, and we believe that you should be paid when consumers are exposed to brand advertising and brand message. For every 1000 impressions, we’ll pay you on a CPM rate. 4 units on a page and you’ll earn CPM revenue for all ads.