What is RPM, and How Mediavine Calculates it

If you’ve ever read a blog post, followed a Reddit thread, or watched a video where a content creator breaks down their income, you’ve likely come across the term RPM.

RPM is a common metric referenced in monetization discussions, especially among bloggers and online publishers. It has also become king among bloggers who compare their earnings.

But what exactly is RPM, and what are content creators comparing?

What is RPM?

RPM, or revenue per mille, is the earnings accrued for every 1,000 units (mille means thousand in Latin) and is the most commonly used measurement in online advertising. It’s the publisher side of CPM, or cost per mille. Advertisements cost advertisers money, so they use CPM. They earn us revenue, so we use RPM.

The textbook definition sounds simple enough, but for such a key benchmarking metric, RPM can be far more complicated — and controversial — than it lets on.

RPM, as a unit on its own, is ambiguous. Much like an inch or a centimeter, it’s just a unit of measurement. You can measure all sorts of things with length. Same goes with RPM. You can calculate it based on pageviews, impressions, sessions, uniques, etc.

You’re simply dividing your earnings by whatever you’re measuring it against and then multiplying by 1,000.

Which of those units should you use, and why does it matter?

At Mediavine, we use sessions as our main metric to calculate overall RPM and compare relative monetization, believing the other popular method — pageviews — has run its course.

We even went so far as to declare that pageviews are dead (mostly for shock value and not literally, but inspired by a very real trend) when it comes to accurately representing website data.

The reason is simple: Sessions, on-site duration, bounce rate, pages per user, and many other custom, site-specific factors offer a much more complete analysis of site performance.

In other words, focusing on pageviews leads to bad user experiences. When Mediavine talks about RPM, we’re looking at the whole picture and, with it, improving user experiences.

The true meaning and value of RPM

Let’s say you improve your site’s user experience by running fewer ads, optimizing your content, and improving site speed as a result of joining forces with Mediavine over another company.

Suddenly, your pages per user and average session duration increase, while your bounce rate declines. That’s great, but do you know what won’t improve? RPM, if calculated using pageviews.

This is because a second pageview is never as valuable to advertisers as the first.

All pageviews are not created equal, and using this singular statistic to compare earnings can provide skewed, incomplete, and backward-looking data.

Let’s say you increase pageviews per user by 20%, or 1,200 pageviews compared to 1,000, while your sessions remain constant at 800. As a result, your total revenue increases 10%, from $10 to $11.

Note that the revenue didn’t increase 20% along with your pageviews, as advertisers pay more for that first impression and each subsequent page declines in value.

In this example, your initial Revenue / Pageviews * 1,000 ($10 / 1,000 * 1,000) comes out to a $10 RPM if calculated using pageviews. Yet after you improved your site, and those numbers changed to $11 / 1,200 * 1,000, you’re at a $9.16 RPM.

You might be thinking, “Wow, my RPM went down even as I got more traffic! My new ad management company must be terrible! I miss the old guys that squeezed every penny out of my pageviews!”

No, you don’t. Here’s why.

Let’s look at what happens when using sessions to calculate RPM instead (same math, different focal point: Total Revenue / Sessions * 1,000).

Using the above example, the original RPM was $12.50 ($10 / 800 * 1,000). After our user experience improvement, the RPM improves to $13.75 ($11 / 800 * 1,000).

This is vastly oversimplified, but it proves why Session RPM is the only real RPM.

The undeniable point is that user experience matters most, getting your audience to spend more time on your site and come back time and time again. This is the only way to calculate RPM that reflects that.

Squeezing every penny out of each pageview and causing a user to never return is not the most effective way, and neither is focusing on misleading, outdated metrics that invite inaccurate comparisons while telling you not even half the story of a site’s value to advertisers.

At Mediavine, we’d rather focus on better user experience, accurately reflecting overall site performance, and ensuring that the RPM you see in your Mediavine dashboard is calculated accordingly.

As far as we’re concerned, this is the RPM that matters. So when you ask Mediavine what RPM is, it’s your earnings, divided by your sessions, times 1,000.