This post was most recently updated on January 18th, 2023
It’s a jungle out there for publishers with so many acronyms to keep in mind like CPM, rCPM, eCPM, true CPM & RPMs. With new monetization schemes popping up every day, it can be hard to keep track of which ones are worth your time (and money). So what’s the best way to measure a monetization scheme? Revenue cost per mile, or rCPM. It’s a little-known metric, but one that can be incredibly useful for many publishers looking to get the most out of their ad campaigns.
In this post, we’ll break down what is rCPM and show you why it’s an important metric for publishers. Stay tuned!
CPM stands for cost per 1000 impressions or cost per mile. You can calculate the revenue made in a CPM deal by multiplying the CPM rate divided by the no. of impressions. That means around 5 million impressions at CPM will be 5000 in total revenue.
Before header bidding became popular, publishers and advertisers often used CPM as the main metric to decide which demand partners should be given priority in the waterfall system. Since the main goal was to scale ad revenue, AdOps partners who were delivering a high CPM for impressions on a weekly basis would be considered the ideal partners to scale ad impressions,
The full form for rCPM is revenue CPM or real cost per mile and is now becoming an equally valuable metric for publishers & advertisers just like CPM. With the rCPM formula, you can estimate how much ad revenue the publisher makes per 1000 ad requests. You must be wondering if CPM is already relevant why do we need rCPM now?
Based on the number of impressions your ad units get, instead of the ones your programmatic media buying partner has agreed to pay for, rCPM shows publishers the real value they expect to get from an ad operations partner. CPMs usually don’t show this kind of data. rCPM calculation is extremely important when you’re using header bidding since many decisions are made based on the CPM an ad network offers.
Page RPM i.e the OG reporting metric in Google AdSense stands for revenue per thousand impressions. By dividing total revenue by page views, and then multiplying that number by 1,000, you can calculate your growing RPM. The RPM metric shows the revenue by page of a website, where CPM is a metric per ad unit, so RPM is, as a general rule, higher than CPM since it encompasses all ad units per page.
rCPM = Gross Revenue/(Impressions/1000)
Let’s say your site gets half a million impressions daily, your specific monetization partner gets half a million opportunities to buy ad space.
In case, there’s a low fill rate with many unfilled impressions, that represents lost ad revenue that should be taken into account when determining the demand partners that need to be prioritized. A publisher can view their rCPM metric statistics through their ad server’s data monitoring tools. Publishers using their own ad server can check their eCPM metrics.
rCPM Calculation Example:
$2000/(500,000/1000) = $4
In this case, the result is not the planned CPM from the ad partner receiving only $4 for all available ad impressions. It is crucial for publishers to calculate rCPM of their ad partners to analyze where they are losing ad revenue & how they can stop it. Calculate the fill rate by dividing the total number of ad impressions by the no. of requests and multiplying by 100%.
Some ad partners might not be having a low fill rate despite showing higher CPMs. Taking advantage of this data, certain ad partners can have frequency caps applied until fill rates increase and the rCPM metric can be used to set the network’s floor prices so that more ads will be filled resulting in more ad revenue.
The effective cost per 1,000 impressions, or eCPM, takes into account how many impressions were actually purchased. Publishers are required to report their eCPM metrics for each of their advertising sources. The eCPM metric shows the value of their ad inventory based on how many impressions their ad partners purchased.
In order to calculate eCPM, the total earnings are divided by the number of impressions in thousands. This is why eCPMs are the summed up average of various CPMs. A publisher can compare results for each of their ad units using this measure. High eCPM is a good metric indicating growing RPMs.
With Header Bidding, rCPMs are a valuable metric for measuring and auditing various ad partners. Although demand partners can now bid on ad impressions simultaneously, the winning ad impressions can still go unfilled. This happens when users bounce from the page before the ad even loads, despite the ad partner winning the auction. High bounce rates cause unfilled impressions. With rCPM, you can account for such discrepancies and have a lower level of revenue loss from that partner than with traditional CPM which could hide this discrepancy.
The key factor affecting AdOps metrics is ad requests without which there would be no scope to fill an ad unit. Stay aware and do not assume ad requests to sustain its value over time. rCPM can be vital to measuring performance because it will change based on total ad request factors.
Publishers sometimes use pageviews as the top metric in scaling RPMs, but solely relying on pageviews won’t help much. For instance: a blog may garner millions of pageviews but few total ad requests. Pageviews will also vary depending on whether the user visits the site via desktop or mobile. A page view on mobile mode may get 2 ad requests, while on desktop mode the same pageview gets double or triple the ad requests.
When it comes to total publisher’s ad requests sold, your audience is perhaps the most crucial influencing factor. Without a user base, there’s no use of ad serving to begin with. Your audience category also goes hand in hand with total ad value. Although some may bounce quickly, others might generate more page views, resulting in more impressions. Advertiser bids can also change if the user has allowed third party cookies or implemented ad blocking technology.
You’re a publisher in the digital advertising ecosystem, who’s agreed on a specific CPM. If your website gets 200,000 ad impressions per day with an 80% fill rate from ad network–giving outline 40,000 paid views each-then $800 is the gross revenue generated every 24 hours. However, since they only leave a quarter of unfilled ad inventory and a tonne of lost impressions, the publisher is losing a lot of money that could have been avoided.
If you take rCPM into account, you look at the total ad impressions that are available to the advertising partner despite the unfilled ad impressions. Keep in mind, that you are not just considering the impressions that the ad partner fills.
In the MonetizeMore PubGuru dashboard, publishers can see where their ad revenue generated comes from in real-time so that they may optimize and maximize efficiency with every impression. With thousands of websites using this platform for years now, there’s no better way to find success than partnering with us today! Most publisher’s revenue spikes in a matter of months without the pressure of lock in contracts.
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rCPM stands for revenue cost per mile or real cost per mile. It tells you the amount of ad revenue the publisher generates per thousand ad requests.
CPM stands for “Cost Per Mile” or cost per 1000 impressions. Advertisers set their desired price per 1000 ads served. eCPM or “Effective Cost per thousand impressions” is used by publishers to determine the revenue generated from a thousand impressions of an ad campaign and to measure the performance of a publisher’s inventory being sold in various channels.
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