What is Online Advertising Page CTR (click through rate), CPC (cost per click) and Page RPM (page revenue per thousand impressions) really means?

In todays online advertising age being online publisher or advertiser you always come across jargons or terms like CTR, CPC, & Page RPM.

Actually all above mentioned terms helps you understand metrics that you want know before you can finalise & execute ‘Online Advertising’ campaigns. It also helps advertiser to make sound decisions on choosing right publisher & on other hand it helps publisher to know where his blog is heading or is his design decisions are right or wrongs? Ad positions & placements are right or wrong or he should tweak his website to increase CTR, CPC & Page RPM respectively.

So here are detail information about:

CTR: Click Through Rate

CPC: Cost Per Click

Page RPM: Page Revenue Per Thousand Impressions


Click through rate (CTR)

The click through rate measures the proportion of visitors who initiated action (click) that redirected them to product page where they might purchase or learn more about a product or service.

The click through rate is the number of times a click is made on the advertisement divided by the total impressions (total number of times an advertisement was served):

CTR = ( Clicks ÷ Number of impressions, views, or queries) × 100%

For example, if you received 8 clicks out of 1000 page views, your page CTR would be .8%.


Cost Per Click (CPC)

The cost per click (CPC) is the amount publisher earn each time a user clicks on ad.

Cost per click is calculated by dividing the advertising cost by the number of clicks generated by an advertisement. The basic formula is:

Cost Per Click $ = Advertising cost in $ ÷ Number of ads clicked


Page Revenue Per Thousand Impressions (Page RPM)

Page revenue per thousand impressions (RPM) is calculated by dividing your estimated earnings by the number of page views you received, then multiplying by 1000.

Page RPM = (Estimated earnings ÷ Number of page views) × 1000

For example, if you earned an estimated $0.15 from 25 page views, then your page RPM would equal ($0.15 ÷ 25) × 1000, or $6.00.

Rate per 1000 impressions, is just a reference of what you are currently earning or will earn for every 1000 impressions.

Hope it helps you to better understand online advertising terms,

Thanks & Regards
Mandar Apte

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