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Paul Narvaez
March 29, 2018

 What’s the Big Deal About CPM? Tracking RPM Makes More Sense

CPM vs RPM Blog Post Image v2

Metrics drive brand advertising decisions, and today’s advanced analytics tools offer deep insight into ad effectiveness. We have the power to gather detailed data on every aspect of our campaigns, from which ads are attracting the most attention to the buying habits of consumers who are clicking on our content.

Many marketing leaders place heavy emphasis on CPM statistics. They want a solid understanding of the expense involved in making every consumer connection. However, focusing on CPM exclusively can be a mistake. The cost of showing an ad is only part of the story. RPM statistics, which measure estimated revenue per impression, tell a far more important story.

Using RPM to Increase Ad Effectiveness

Calculating estimated revenues from customer interactions allows you to compare the potential value of each channel in your marketing mix. Often, advertising professionals discover that investing in content with a higher CPM can boost bottom line results, as high-revenue (RPM) content marketing offsets the additional CPM expense. Industry leaders like Google Adsense deal almost exclusively in RPM for this reason. Consider these examples:

You advertise on a website that has 5,000 page views per day. If your ads generate an estimated total of $50 in revenue per day, then your RPM is $10 based on the following formula: RPM = (Estimated earnings/Number of page views) x 1,000.

Your CPM is quite different. When calculating CPM, you are focusing on the expense incurred for each impression. If the cost for running the ad described in the previous scenario is $5, your CPM is $1 based on the following formula: CPM = (Cost of 1 unit of a media program/Size of media program's audience) x 1,000.

Your cost is certainly a relevant factor in decision-making, but increasing RPM — the revenue that comes into your organization — is far more important to your bottom-line results.

Increasing Ad Engagement Through RPM

As you develop your digital marketing strategy, make sure you are comparing apples to apples. Calculate the RPM for each channel, and make advertising decisions based on the content and platforms generating the best revenue for your business.

Next, set goals for continuous improvement of RPM in the most lucrative spaces. Effective methods of increasing ad engagement — and subsequent RPM — include the following:

  • Keep content fresh and relevant — The more up-to-date your content, the higher your engagement.
  • Pay attention to keywords, without going overboard — Consumers recognize and reject gratuitous and irrelevant keyword use.
  • Avoid oversaturation — If you publish a site, don’t be tempted to interrupt content flow with an excessive number of ads.
  • Regularly rotate low RPM content out, in favor of new, revised or better-performing items.

Finally, you can ensure your RPMs stay high — and go higher — when they are housed on a well-designed and technically-superior site. Issues with long load times, unattractive user interfaces and hard-to-maneuver pages guarantee low RPM, as consumers rapidly move on to more user-friendly sites without making a purchase.

Constant creation of engaging content can be a challenge. Fortunately, there are services specifically focused on simplifying this process. For example, Insticator offers you the ability to incoporate interactive quizzes, custom polls, suggested stories and contests directly into your content. Learn more about leveraging your RPM data to increase revenues by visiting the experts at Insticator.

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