Are you getting the most from your monetization efforts? There are always tactics and improvements you can make to increase your revenues. Let’s take a look at different metrics we use to optimize our earnings. It’s important to consider every metric that affects your bottom line but also consider how they all relate to each other (you know, like apples to oranges?)
What is CPM?
CPM stands for cost per mille or cost per 1000 impressions, and it relates specifically to individual ad units on the page. CPM is a key metric for advertisers as it conveys how much they have to pay for every 1000 ad impressions. For example:
CPM = (Campaign budget / number of impressions) * 1000
Let’s take the example of an advertiser that has a budget of $10,000 for a campaign and they want to buy 5,000,000 impressions on your site.
CPM = ($10,000 / 5,000,000) * 1000 = $2 CPM
What is RPM?
RPM stands for revenue per mille or revenues per 1000 pageviews. RPM is a key metric for publishers to measure the value of different types of ad pages. For example, if you want to compare the earnings of different page layouts, traffic sources, or content types.
RPM = (Revenues / pageviews) * 1000
Let’s say that yesterday, your total revenues were $5,000 and you had 1,000,000 pageviews.
RPM = ($5,000 / 1,000,000) * 1000 = $5 RPM
We can see that RPM is higher than CPM as it takes into account the earnings from all the ad units on a page.
What is RPS?
We see that CPM looks at individual ad units, RPM looks at pageviews, and RPS looks into overall session revenues. Again, RPS stands for revenues per 1000 sessions. You can consider RPS the mother of all metrics because it tells you how much you are earning for the users you are bringing to your website, taking into consideration multiple pageviews per session/visit.
RPS = (Revenues / sessions) * 1000
Let’s say that yesterday, your total revenues were $5,000 and you had 500,000 sessions.
RPS = ($5,000 / 500,000) * 1000 = $10 RPS
We can see that RPS is higher than RPM as it takes into account the additional pageviews that a visitor views in a session.
OK, So Which to Use?
All are important, but you should always start by looking into your RPS and use the other 2 metrics to drill down on how to improve earnings with this more holistic approach from above. This is because RPS takes into consideration all the factors in a users’ visit to your site including page clutter, page speed, bounce, fill, time on page, refresh, etc.. For example:
- Maximizing for CPMs by adding floor prices will increase CPMs but decrease fill, leading to lower RPM and RPS.
- Maximizing for RPM, by adding more ad units to a page will increase RPM, but can decrease RPS as pages will be crowded, slower to load, and can therefore lead to higher bounce and fewer pageviews per session.
- So we see that maximizing for RPS requires the delicate balance around increasing CPMs and pageviews. Simply put, at the end of the day, it’s about maximizing the value of every user that comes your site which also means improving the user experience to keep them on your site and driving more impressions through multiple pageviews.
There are many things you can do to improve your RPS to increase your overall revenues. Though, as with all things programmatic, you will need to test, analyze, optimize, and test again to find what works best for your site.
- Header Bidding. We say this all the time, but intensifying competition for your inventory drives revenues.
- Increase targeted traffic. Relevant users engage. Engagement drives CPMs, RPMs and therefore, RPS.
- Improve viewability. Advertisers bid much more for ads with 60%+ viewability. Consider adhesion and other high impact units to drive up viewability.
- Improve content. Keep users interested and navigating through your site.
- Work on improving pagespeed and avoid ad clutter. User experience is critical to driving more pageviews, and therefore, more impressions.
Any metric that impacts your bottom line should be tracked and optimized. An experienced adops partner can help. The first step is always providing great content that engages your users. This will improve CPMs, RPMs, and ultimately RPS. Adapex works with our publisher partners to take on the heavy lifting on monetization so you can focus on creating great content. Want to improve your RPS and accelerate revenues? Let’s talk.