What does Impression RPM mean?
So for example, if you had 40,000 ad impressions with an impression RPM of $2 you would receive $80. This is because you receive $2 per 1,000 ad impressions, and $2 multiplied by 40 is $80.
Impression RPM is virtually identical to CPM. The main difference is that RPM is from the point of view of the website owner, and CPM is from the point of view of the advertiser.
Impression RPM Definition
RPM stands for Revenue Per Thousand (M is the roman numeral for one thousand). Impression RPM and Page RPM are distinct from each other, as most of the time when the word ‘impression’ is used, it is assumed that ad impression is meant. So Page RPM measures revenue per one thousand page views, and Impression RPM measures revenue per one thousand ad impressions.
The above formula shows the revenue as being estimated. This is because this metric is generally an estimate. Like eCPM, it takes many campaigns of many different types and combines them to estimate total revenue, and then divides that amount up between the impressions delivered.
Impression RPM Formula
The equation for Impression RPM is:
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Impression RPM = (Ad Revenue / Ad Impressions) x 1000
RPM and CPM are different metrics as RPM means revenue whereas CPM means cost. These may seem the same, but due to fees etc, they are not. Revenue is the amount paid to publishers whereas cost is the amount paid by advertisers. Even if one advertiser took all the impressions on a site in a CPM deal, the CPM and RPM will probably still not line up.
For example: Johnny’s Fruit Juice has a big ad spend and buys up all the space he can find on fruit juice websites. He pays £5 CPM to all sites he works with, and goes through an agency. The agency uses a third party ad server to deliver the ads.
The agency charges 20% of ad spend, which takes the CPM down to £4. The third party ad server charges a (high) 10p CPM. This leaves £3.90 CPM.
Fruit Juice World is one of the websites that the agency chooses to place Johnny’s Fruit Juice ads on. They work with an ad network who they have a 50% rev share with. As a result this means Fruit Juice World are actually only paid half of the CPM of campaigns booked with them. This gives them an Impression RPM of £1.45.
What it looks like
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Note: It would actually not end here most likely. Ad networks could have their own ad serving fees too, and often give agencies discounts of up to 20%. Therefore it wouldn’t be surprising if the final figure from a £3 CPM was more like £1 Impression RPM. The ad network would only present this final figure to the website however, and the agency would never break the figures down like this, so neither would find this out.
This is one of many reasons why direct deals can be advantageous to both advertisers and websites. However this of course doesn’t take into account the added value of the expertise both advertiser and website are getting, and the consistency of revenue/opportunity they are provided. It is much more difficult to go it alone!
Other names for Impression RPM (synonyms)
CPM or eCPM (essentially)
Not to be confused with
Page RPM, RPM or REM.
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Author: Justin Driskill
Justin is the founder of The Online Advertising Guide and a freelance Digital Projects Manager.