Comparing Apples and Oranges – Lets look at RPM Rate vs CPM Rate
A great deal of publishers considering running Gourmet 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 is turn creates a level of confusion with publishers. Most publishers don’t realize that RPM Rate is a page rate and CPM Rate is an Ad Unit rate.
So what is RPM Rate?
RPM is an acronym for Revenue Per Mille (Mille means “thousand” in Latin) which is the basically “Revenue per 1000 impressions” of a webpage. It’s much easier to think of it as a Page Rate. Clearly if you have 4 ads on a webpage 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 page views, impressions, or queries you received, then multiplying by 1000.
RPM Rate = (Estimated earnings / Number of page views) * 1000
So 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 do Google Report RPM and not CPM?
Google are sneaky and misleading; just try and find how hard it is to 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 – but if you have a CPM rate of $1.00 per ad Unit. If you only have 2 units, then the CPM per unit will be $2. Remove the units of measure meant (i.e. RPM or CPM) and $4 is always going to sound better than $1 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 have the advertising perform, i.e. they are focused on Direct Response Advertisers looking for conversions. So if you run Google Ads and don’t get a click you won’t earn any revenue. Not really fair is it ?
Gourmet Ads CPM Rates for Publishers
Gourmet Ads prices CPM at the Ad Unit Level and we sell ads on a CPM basis to our advertisers and their agencies. We consider your website as a billboard with an audience of grocery buying consumers and that you should be paid when consumers are exposed to brand advertising and their 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.
