There are several metrics that help you understand how your ads are performing. The most common metric in the ad industry looks at average earnings per 1,000 pageviews, or RPM.
RPM is calculated by taking total ad earnings for a specific time period and dividing it by total PAGEVIEWS for the same time period, then multiplying the result by 1,000.
RPM is the most effective way for most sites to measure overall ad performance and earnings because it’s one of the only metrics that takes everything into account and tells you the straight truth about how much money you’re making for your traffic. The higher your RPM, the more money you are making from each pageview.
Since RPM is just a way to measure how well each pageview is earning, more pageviews do not necessarily result in a higher RPM. While getting more pageviews means you earn more money overall, it doesn't mean each pageview earns more. There are a lot of factors that come together to create your site’s unique RPM, and you can read more about that right here.
RPS, or revenue per 1,000 sessions, is calculated by taking total ad earnings for a specific time period and dividing it by total SESSIONS for the same time period, then multiplying the result by 1,000.
Let’s say someone comes to your site and checks out your recent post, then browses through your related posts, and finally reads through some older categories. The time they spent browsing your site is called a “session,” and it included multiple pageviews. Each reader can have multiple pageviews during one session.
This means RPS can be a more useful measurement for sites that use pagination, galleries, or other features that lead to higher than normal pages-per-session.
How are RPM and RPS related?
Both are calculated using the same root information: your total ad earnings from a given time period and the pageviews and sessions Google Analytics reports for that same time period. So they’re two different ways to break down the same data.
Advertisers tend to bid the most to reach a visitor on their first pageview. As the same reader clicks through to multiple pages, each pageview becomes slightly less valuable to advertisers and earns slightly less. That means as a reader views more pages, your RPM decreases (because each pageview is a little less valuable), but your RPS increases (because the session overall registered more ad impressions than if the reader had only looked at one page).
Your sessions will always be lower than your pageviews, because every session results in at least one, but often more pageviews. Therefore, no matter what, your RPS will always be a higher number than your RPM.
If your site has a high number of pages per session (2 or more), you’ll want to look at the RPS metric, because your RPM will be lower than sites with fewer pages per session. If you have an average number of pages per session (in the 1 – 1.5 range), we recommend focusing on RPM for the best snapshot of how your ad layout is performing.
You can always view both metrics in your AdThrive dashboard, but unless you have a unique situation that leads to a higher-than-average number of pages per session, we recommend using RPM because it’s the most common and standardized way to understand how your ads are working.
It can be easy to worry about RPM, but it’s definitely not the only measurement of your site’s success. Don’t forget that you can actually earn more money overall even if your RPM is lower than someone else’s, and an engaged, loyal community of readers can be worth far more than high metrics!
Keep reading: What goes into RPM?