Stands for "Revenue Per 1,000 Impressions." RPM is similar to CPM, but measures the revenue from 1,000 ads impressions instead of the cost of the ads. Therefore, while CPM is typically measured by advertisers, RPM is monitored by publishers.
For example, a publisher has a website that gets 5,000 page views each day. If the advertisements on the website generate a total of $25.00 of daily revenue, the website has an RPM of $5.00 ($25 ? 5). Web publishers use RPM as a way of measuring how effective advertisements are at generating revenue. If certain advertisements generate a low RPM, publishers will likely switch to different ads that provide higher RPM rates and higher revenue. RPM is not only used in online advertising, but is measured in several other types of advertising mediums as well.
Though it somewhat confusing, RPM and CPM are often interchangeably. While CPM stands for "Cost Per 1,000 Impressions," it is commonly used synonymously with RPM to describe the average revenue from the publisher's perspective.
Updated: October 16, 2007