The term RPM might be foreign to you, and sometimes it creates confusion for new Adsense publishers. RPM is an acronym for revenue per mille (mille means thousand in French) impressions. In simple words it shows how much money you have earned from a 1000 impressions on your blog. It helps individuals and bloggers to get an information about the kind of ads that are performing well on the blog.
Let us now use a random example to completely explain the concept of RPM. If your Adsense account has an average RPM of let’s say, $5.00 this means that your blog/website is earning around $5.00 per 1000 impressions. If you want to make $1000 per month then you will roughly need to have 6,600 page views per day. RPM is very important for a blogger as it helps him to make a realistic prediction about his/her future earnings. RPM is also important as it helps blogger to maximize his/her earnings in most effective way possible.
The formula used to calculate estimated revenue is as follows. The page views are divided by 1000, then the answer should be multiplied by the average RPM. At last the result should be multiplied by the number of days in a month to get your monthly income.
CPC refers to the actual price you pay for each click in your pay per click (PPC) marketing campaigns. It depends on the advertiser; sometimes advertiser is willing to pay more per click than others, mainly depending on what are they advertising for. A click on your PPC text ads basically represents a visit or any interaction with your company’s product or service offerings. It represents attention from a person who is in search of something that you are offering. As an advertiser, what you are buying, is this attention. Keep in mind two factors,
-What kind of attention are you going for your blog/product
-How much are you going to pay for it.
Here is a formula to calculate cost per click:
______ Complete Adrank__________+ 0.01= actual CPC
your quality score
As an advertiser your cost per click will always be less than or equal to your maximum bid. Your actual cost per click is heavily influenced by you and your closest competitor’s ad rank, maximum bid and quality score. Average CPC varies widely by the industry and business type but the average CPC across all industries is about $2.00.
Cost per click is important because it is the number that is going to determine the financial success of your paid search campaigns. Your return on investment will be determined how much you are paying for clicks, and by the quality of traffic you are getting for that investment.RPM and CPC are very closely linked to each other, so if you have a higher CPC then obviously you will have a higher RPM too.