When an advertiser wants to run an ad campaign, we will use the CPM campaign where you will be charged for the number of impressions of your ad. The metric used to indicate the performance of the ad campaign is known as CPM.
When a publisher wants to show an ad on their site or mobile app, they will be paid for the number of impressions an ad was served on their website or mobile app. The metric used to indicate the amount of money the publisher will make is known as RPM. CPM vs RPM
The main difference between CPM and RPM is that CPM is from an advertiser’s point of view and RPM from a publisher’s point of view.
Comparison table between CPM and RPM (in tabular form)
CPM RPM comparison parameter
|Sense||CPM stands for Cost Per Mile, which is the amount the advertiser will be charged for displaying 1000 impressions of their ad.||RPM stands for revenue per mile, that is, how much a publisher will earn when displaying 1000 ad impressions on their web property.|
|Calculation||CPM is calculated by dividing the total cost incurred by the advertiser with multiple impressions and then dividing it by 1000.||RPM is calculated by the ad broker. The publisher has no control over the RPM numbers. CPM vs RPM|
|Use||This metric is used to test which ad campaign performs best for the advertiser.||This metric tells the publisher if they get paid a good amount compared to another ad network / broker.|
|Improvement||When the advertiser starts a CPM campaign, artificial intelligence is used to decide the best target audience for the campaign.||The publisher can try to optimize its RPM by creating multiple ad placements and testing different types of ads, such as text ads, links, images, and videos.|
|cost||The advertiser is billed for 1000 impressions.||The ad network / broker takes a commission cut and transfers the remaining amount to the publisher.|
What is CPM? CPM vs RPM
CPM or cost per mile is a cost that an advertiser will pay to run their brand or product awareness campaign.
CPM campaigns are the default campaigns that are supported by all advertising brokers in the online advertising industry.
The process of creating a CPM-based campaign includes the advertiser creating an ad copy for the ad and deciding the daily budget that the advertiser is willing to spend on the ad campaign. The budget is the total amount of money that the advertiser wants to spend. CPM vs RPM
After the ad campaign has been running for some time, the CPM is calculated by dividing the amount of money in the campaign by the number of impressions delivered for the ad and then dividing that number by 1000.
It is worth mentioning here that when launching a campaign based on CPM, the CPM is high but as artificial intelligence gets to know more about the target audience, the campaign is automatically optimized. This optimization results in lower CPM rates after the campaign has run for a few days.
What is RPM?
RPMs are known as revenue per mile. This indicates the amount of money a publisher will make after displaying 1000 impressions on their online property. CPM vs RPM
RPM is calculated by dividing the amount of money earned by the publisher by the number of Advertising Impressions delivered by him. As with CPM, here too the RPM is optimized once it has been running for a few days. Artificial intelligence technology identifies the audience’s interest in the publisher’s web property and then delivers matching, interest-based ads to the audience.
Since the publisher has no control over what type of ads will be served on its web property, it is possible that it is running other types of ad campaigns.
The earnings report displayed on the ad broker portal will show the and the RPM to the publisher. CPM vs RPM
Main differences between CPM and RPM
- CPM is from the advertiser’s perspective, while RPM is from the publisher’s perspective.
- CPM is the cost that an advertiser will pay for having served 1000 impressions for their ad. RPM is the amount of money a publisher will make once 1000 impressions have been served on their property. CPM vs RPM
- The CPM metric is used to compare the performance of two or more ad campaigns by an advertiser. The RPM metric is used to compare the performance of two or more ad networks of a publisher.
- In addition to CPM, the other types of ad campaigns available to an advertiser include CPC, CPI, and CPA with the option to start any campaign they want. Similarly, for a publisher, the available campaigns are CPC, CPI, and CPA with no option to choose between them.
- The advertiser has the option to change their ad campaign based on the marketing objective. The publisher does not have much control over the advertising campaign that will run on his property. The best thing an editor can do is optimize ad placement so that more people can see and click on the ads.
CPM and RPM are metrics for 1000 ad impressions. While CPM is relevant to an advertiser, RPM is relevant to a publisher.
If you are an advertiser, you should focus on optimizing your ad campaigns based on CPM, and if you are a publisher, you should focus on optimizing your ad placements based on RPM.