These days there is so much information at our disposal, with metrics for almost everything. Sometimes, there are some metrics that do not just show a picture but also tell a story. For example, for Students, your GPA (Grade Point Average) shows how good a student you are, for growing businesses your CAC (Customer Acquisition Cost) shows you how much it costs to gain a new customer and grow your business. For Publishers like you, there is Page RPM.
What is Page RPM?
Page RPM refers to the revenue a publisher would expect to see generated per one thousand page views. RPM is an acronym for Revenue Per Mille, with Mille being the Latin word for a thousand (for those of you thinking back to college that’s why Roman numerals have M for a thousand!).
RPM tells a publisher how much revenue is being generated for each page that is viewed on their website. A publisher can even calculate the Page RPM for individual pages.
How do you calculate it?
Before you can calculate Page RPM, you need to know 2 numbers;
- Total Ad Revenue – how much ad revenue you think you have made
- Total Page Views – how many times a user views a page
The formula used is as follows:
Total Ad Revenue / Total Page Views * 1000
If you have 4k page views per month and an estimated ad revenue of $30, your Page RPM would be ($30/4000)*1000 = $7.50
Why it is Important?
Knowing how much you are able to earn per thousand page views opens up the ability to calculate the page RPM for individual pages. With this knowledge at a page level, you would be able to determine page performance and prioritize improving or maximizing the monetization of pages accordingly.
The page-level performance also affords you the ability to use Page RPM to act as a barometer for more granular optimizations such as the number of ad units per page, effects of tools such as lazy loading, and testing different page layouts with ad units in different positions.
Page RPM shows you the revenue made every time the page is loaded and reloaded, giving you an accurate picture of revenue and site value.
Page RPM and Supporting Metrics
There are a number of metrics publishers use to gain the most insight as possible in order to make the right decisions when it comes to monetization and yield optimization. Here are a few comparisons and common metrics publishers ask about:
RPM vs CPM
CPM = Total Amount Spent / Total Measured Impressions * 1000
While RPM (revenue per mille) measures revenue by page views, CPM (cost per mille) measures cost by ad impressions. The difference you need to get your head around is that RPM calculates the collective CPMs for all ad units on a page, while CPM refers to the cost an advertiser is willing to pay for a single ad unit. In effect, RPM is a publisher metric and CPM is an advertiser metric.
RPM vs eCPM vs Impression RPM
eCPM / Impression RPM = Total Ad Revenue / Total Impressions * 1000
Essentially RPM and eCPM (effective cost per mille) / Impression RPM are measuring the same thing, but looking from different perspectives. eCPM is used by advertisers to decide where to invest and spend their ad budgets to display their ads. Whereas, RPM is used by publishers to understand how their site is performing and perform the necessary optimizations to improve revenue. Impression RPM brings eCPM to publishers. This means instead of looking at the entire page being loaded, this metric looks at when ads are loaded. Impression RPM as a tool can be useful but on it’s own can be misleading. For instance, adding an extra ad unit below the fold to an already good performing page may lead to an improved Page RPM with more impressions being shown. However Impression RPM has fallen even though overall monetization has improved, as the below the fold ad unit may not have performed as well as the above the fold ad unit.
Page RPM vs Ad Request RPM
Ad Request RPM = Total Ad Revenue / Total Ad Requests * 1000
The nuances are slight here but important, while impressions are concerned with ads delivered, requests are an efficiency score concerned with how many times an ad is requested. Ad request RPM tells you how much revenue is generated for every thousand ad requests. This metric now takes fill rate into account and helps to give an overview of how many of the ad units were actually filled.
Page RPM vs Session RPM
Session RPM = Total Ad Revenue / Total Sessions * 1000
Session RPM provides insight into the effects of user experience on overall revenue. For example, sessions look at the number of visits/users to the site, so if a publisher was to add more ad units to a page they may see an increase in Page RPM. However if Page RPM has increased but overall page views have decreased, then perhaps overall revenue would have reduced as well and the user experience due to any changes could be to blame.
What Influences Page RPM?
Despite all the different elements that can be tested and tweaked with regards to improving Page RPM, two metrics stand out and directly influence your Page RPM, these are:
- CTR (Click Through Rate) – Total Clicks / Total Ad Impressions * 1000
This measures the number of clicks your ads receive per thousand ad impressions and is a key indicator of performance. If an ad has a good CTR, then the ads are being clicked on more by users, driving revenues higher as CPC bids from advertisers increase for this ad unit.
- CPC (Cost Per Click) – Total Ad Spend / Total Clicks
This metric shows the amount an advertiser is willing to pay for a click on ads placed on your site. The higher the CPC the higher your revenue.
If you want to see an increase in your Page RPM, a good CTR and a higher CPC are both metrics you need to be paying attention to.
How do you Increase Page RPM?
Page RPM can be improved in many ways, we have broken down what to pay attention to into three parts, your site, your users and your advertising.
- Site Speed and Performance
As obvious as this may sound, content is the main reason users visit your site. Often editorial and advertising priorities are not aligned, however, focusing on better quality content will lead to a better relationship with your audience. When an audience is engaged and loyal, this will eventually enable you to achieve a higher Page RPM as all other metrics show your users are both interested and engaged.
With site performance being a step by step checklist of improvements and measures, ad layout optimization means testing, monitoring and optimizing multiple ad unit combinations across your site. Ensuring your ads are viewable has become a key point of consideration for the industry as ad viewability becomes a unit of reference when deciding to buy from a site. Testing different ad formats is key, some areas of a page or the site as a whole may be better for video, display, text or even expandable ads. This is not to say focusing on high CPM ad formats immediately means a better Page RPM. Remember, a user can only click on one ad per page view. You will need to experiment and find the optimal combination of ad formats in order to maximize ad revenue.
- User Experience
As we mentioned, your users do not visit your site to see ads (unless you run a site that reviews different ads!) so ensuring you give them an experience that doesn’t make them leave your site is key. Metrics such as bounce rate and repeated visits help to show you if users either immediately leave or eventually return. A good user experience will bring users back and is a better investment in improving Page RPM than just throwing more ads onto the page.
- Relevant Content
Now just because you create content on a particular subject, it does not mean all content is relevant for every user, nor can you ensure that every user is visiting your site for the right reasons. What this means is making your site sticky for users to stay on the site and explore more pages is a great strategy to make sure users are consuming relevant content. Content recommendation tools can really help here in increasing Page RPM. Also, paying close attention to traffic sources can help in optimizing where you focus traffic acquisition efforts.
- Relevant Ads
Controls exist to ensure you set up targeting and allow appropriate types of advertising for your users. Whether contextually relevant or targeting different sections of your site for different audiences, showing relevant ads go a long way in making sure users engage with your ads and therefore improve your Page RPM.
Your Advertising Stack
- Demand Optimization
Ultimately demand optimization is all about increasing the bid price from advertisers. There are a number of ways to stimulate pressure and competition, DSPs (demand-side platforms) optimize against the bid requests. So a good way of encouraging this competition is by introducing more tier, 1 demand partners. Having more demand partners increases the number of bids, having more tier 1 demand partners encourages the competition to increase their bids. More demand partners is a sure-fire way to increase fill rates and increase the options of monetizing as many of your impressions as possible.
A great way to increase competition in your ad stack is to utilize header bidding. This programmatic advertising technique replaces the traditional waterfall technique with a system that allows multiple demand partners to bid simultaneously for the same ad impression. The highest bidder gets to display their ad. This efficiency reduces ad loading times helping to speed up site performance and ad viewability, which makes for a more efficient auction as you are exposing inventory to more interested buyers. With more interested buyers, you should see higher fill rates and higher bids, increasing ad revenue and therefore Page RPM.
If there was an advertising technique designed with Page RPM in mind, it is ad refresh. Here, multiple ads are served in the same ad unit space to the same active user, only when a refresh is triggered for a new ad to display upon a predefined condition being met. This condition could be based on a user action or time spent on a page. Ads are only refreshed when the ad unit is in view, ensuring ad viewability. With more ads being shown on effectively the same visit you will see an increase in Page RPM.
Page RPM is an integral weapon in a publisher’s arsenal in order to better manage their site monetization and optimization. Page RPM is a platform from which you can base knowledge to act in conjunction with other metrics to make more informed decisions. Testing and measuring is an integral part of the process and this takes time.
No single metric tells you the full story, however Page RPM is a great opening chapter to set the tone..