RPM is an abbreviation for Revenue per Mille. (Mille being Latin for thousand). So, Page RPM refers to the Revenue earned per thousand views of a webpage. Page RPM is also referred to as the eCPM in the Google Adsense interface.
The page RPM is calculated by dividing your total earning from the ads shown on a webpage by the total number of page views and then multiplying by 1000. It is always calculated as a currency value.
Page RPM = (Total Earnings of the webpage / Page views ) * 1000
This formula works irrespective of how many page views you have. So if you have made 1.00 USD for 50 page views, then it is estimated that you will earn 20 USD if there were 1000 page views.
(1/50) * 1000 = 20
If you made 50 USD from 3500 page views, then the revenue you earn per 1000 page views is 14.29 USD.
(50 / 3500) * 1000 = 14.29
You can also consider the revenue earned in terms of the clicks and Cost per Click (CPC). That means the revenue earned is a product of the number of clicks and the average CPC that your ads are getting. Thus further breaking down the formula in terms of clicks and CPC.
eCPM (or Page RPM) = (# Clicks * Avg Ad CPC / Page Views) * 1000
Again the number of clicks you generated can be expressed in terms of the number of ad impressions that you got while displaying the web page. Thus we can express the above formula as
eCPM = Ad Impressions * Ad CTR * Avg Ad CPC * 10 / Page Views
As with any statistical calculation the more data you have, the better the results. That means the more page views you have and the more number of clicks you have, the more accurate the Page RPM.
Ideally you want the page RPM or the eCPM to be as high as possible. From the formula that we derived above you can see that there are mainly two ways that you can increase the eCPM …
Increase the Ad CTR
Increasing the Ad CTR actually means that you are increasing the number of clicks per page view. There is no straight forward way to achieve this other than to try out different things and figure out the strategies that work best for your site. Some of commonly tried techniques are
- Different webpage layouts
- Different sets of ad slots in the layouts
- Generating relevant content which draws traffic and competitive ads
- Different Ad sizes and Ad types
- Different Ad formats
Increase the CPC of the ads
Increasing the CPC of the ads is directly dependent on the type and quality of the content on the web page. There are some keywords which generate higher competition and thus a higher CPC. Find a high paying niche or find high paying keywords within your niche in order to increase the CPC of the ads that is getting displayed on your webpage.
You might have also noticed that the increase in page views will actually decrease your eCPM. But the page views will always keep increasing as long as page is popular and this increase is actually required for you to generate more clicks and thus more revenue.
So, we will consider the increase page views as inevitable and remove it from consideration of factors affecting the eCPM and revenue. The same goes for Ad impressions as well. Ad impressions are usually a more or less standard multiple of the page views as you usually have a definite number of ads per page.
Factors affecting the eCPM
We can narrow down the factors that directly affect the eCPM of your webpage or website from the two requirements that we stated above.
The topic of the website and the keywords that you are writing about is a major factor in the revenue generated. This decides on what type of ads are matched and shown on your website. Generally advertisers pay more for highly competitive keywords. Some of the niches may also notice some seasonal variances, such as holiday and Christmas ads are worth more during the holidays than other times of the year.
According to AdSense rules, you are allowed only three slots in a webpage and there are several different ad sizes for you to choose from. Some ad sizes are more popular than others which means there is more competition for those sizes.
Not all advertisers create ads for all ad sizes, but generally they pick a few common sizes. Most of the times the larger ad sizes are more popular and competitive.
Traffic quality can determine the Ad CTR of the web page and thus the revenue. Generally search engine traffic generate more clicks than regular visitors. Visitors in the tech niche have a lower click rate than visitors in other niches. Your particular niche and traffic sources will have its own quirks and generate clicks at varying rates. Widening the sources from where you get traffic is a good idea.
You should view eCPM as a measure of the revenue potential of a web page. It can also be seen as a measure of how well the ads are performing in the context of this web page.
Some times RPM is also used to refer to Ad RPM which is different than Page RPM. Ad RPM is calculated per 1000 Ad impressions as opposed to page impressions which is used in the calculation of page RPM.