What is CPM and RPM in Google Ad-Sense Earnings Reports ? Use of CPM and RPM in Online Advertisement
Today I will discuss about the two Key elements of Earnings from Google Ad-Sense, which we can see on Google Ad-Sense Reports or in YouTube Analytics Reports. I have added a video later in this article for better understanding. This article is for both kind of people
One, which are Running their YouTube Channels. Secondly for those, who are running a Website.
It is very important to know about these key elements to understand the actual Earnings from Online Ads that are being shown on YouTube or Website and Blogs. And these two elements are CPM and RPM.
While reading this article, you need to know three kind of people which are playing important roles in Online Advertisement.
- a) Publisher – One who publishes the Ads on your channel or Website. You can consider any Big Publisher into your mind, Like YouTube, Google or any other.
- b) Advertiser – who contacts to the Publisher to publish Ads given by the Advertisers.
- c) YouTube Channel creator or Website Owner where the Ads are placed for advertiser, with the help of Publisher.
Do read this article till the end otherwise you might not understand these most important elements perfectly.
CPM (Cost per Mille):
Let’s talk about CPM first:
CPM stands for “Cost per Mille” where M refers to the Roman Number thousand. It has two more names: CPI (Cost Per Impression) and CPT (Cost Per Thousand)
This is the cost which an Advertiser pays to Ads Publisher for every 1000 Ad Impressions. In other words, it is the cost that an Advertiser pay for each time, the Ad is displayed on YouTube or any other webpage.
Let’s understand with an example:
If an Advertiser has the CPM of 4$, then it means the Google or YouTube will take 4$ from the Advertiser for 1000 Ad Impressions which means 1000 Times the Ad will be displayed in 4$.
You must remember here that this 4$ is not your final earnings based on CPM. YouTube keeps 45% of this and rest 55% is given to you which means Out of 4$, YouTube will keep 1.8$ and rest 2.2$ will be given to you.
The main advantage of CPM is even if you don’t get huge traffic or clicks, you still earn money against each Ad Impression with less traffic, as a Website owner or YouTube channel owner.
Hope you understood about the CPM.
RPM (Revenue Per Thousand):
So let’s move to the RPM which is a very important factor. Full Form of RPM is Revenue Per Thousand.
Revenue per thousand impressions(RPM) represents the estimated Earnings that you receive for every 1000 Ad Impressions shown. RPM doesn’t represent the exact earnings from YouTube.
Instead of that, RPM is calculated by dividing your estimated earnings by the total of Ad impressions your received, and then multiply it by 1000.
Ad RPM = (Estimated Earnings/ Ad Impressions) *1000
Suppose if your estimated earning is 100$ from 20,000 Ad Impressions then your earnings that comes out will be 5$. You don’t need to calculate every time, Google Ad-Sense automatically calculates and it will be shown to your Ad-Sense Account.
“After explaining these CPM and RPM, I can say that CPM is what the Advertiser pays to YouTube and RPM is what the YouTube pays to you”.
So here we have added a video for better understanding of CPM and RPM:
In the next article, I have described about CPC and PPC. So, do not miss that.
Thanks for reading this article.