What does RPM mean?
RPM refers to revenue per thousand views. It's a dollar figure that we use to express how much you earned averagely per 1000 monetized video views on your channel.
How is RPM calculated?
The calculation for RPM is as follows:
RPM = (revenue earned / total monetized views) * 1'000.
So if you earned $200 in a month with 100'000 monetized views, then your RPM would be $2. See below the calculation to get this:
(200/100'000) * 1'000 = $2
Why is RPM important?
The RPM is important because it gives you an average figure for how much you are earning for every 1'000 monetized video views on your channel. Because there are so many different ad types and formats, it's also important to combine all of these into an easily understandable figure.
We've spoken a bit about RPM above, and in this calculation we include the revenue you have earned. So it's important to also take a brief look at what factors contribute to this. Quite simply, the revenue you earn is related to how many adverts are placed on your videos and what type of advert it is.
Each different ad format earns revenue in a different way, for example revenue for a banner ad will usually be applied when someone actually clicks the banner, whereas revenue for an instream ad will be applied after the viewer has watched 30 seconds of the ad or to its completion. When revenue is applied to a video view, we call this a monetized view.
So revenue is calculated by adding together the dollar value for every single monetized view you get in a month. If in one month you had a total of 10'000 clicks on a banner ad, with each click being worth 1¢, then your total revenue for that month would be 10'000 * 0.01, which would work out to be $100.
Where RPM is used
You will see both of these figures used in your monthly revenue reports.