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  • Welcome to Unit 1: Understanding CPC

  • and CPM. The world of online advertising is filled with acronyms.

  • CPC, CPM, RPM... the list goes on.

  • While these acronyms represent important metrics, it can be hard to know where to start

  • when it comes to increasing these values and, ultimately, increasing your revenue.

  • It's also the case that many of the common acronyms used in the online advertising industry

  • can sometimes mean different things depending on the context and the usage,

  • which can be really confusing. Let's walk through the most important ones right now,

  • starting with CPM. CPM stands for cost per 1000 impressions.

  • From the advertiser's perspective, CPM refers to the price

  • they're willing to pay to serve one thousand impressions of their ad.

  • So in the AdSense auction if an advertiser bids

  • a CPM of two dollars, this means he or she is willing to pay

  • two dollars for every thousand times the ad appears to a user.

  • You may have noticed that there are no CPM values in your AdSense reporting.

  • In AdSense performance reports, we use the acronym

  • RPM, which stands for revenue per 1000 impressions.

  • Since ads are not displayed in even bundles of one thousand impressions

  • all impressions served on your site, regardless of the bid type,

  • are combined and averaged in your reporting to show your affective revenue

  • per 1000 impressions, or RPM.

  • To recap, RPM is an AdSense-only term used to report your impression-based revenue.

  • CPM is an industry-wide term

  • that refers to impression-based bids from advertisers.

  • The next acronym to know is CPC.

  • CPC stands for cost-per-click. The cost-per-click

  • is the price an advertiser pays each time a user clicks on an ad.

  • In your reporting, CPC metrics show the revenue you receive

  • each time a user clicks on an ad on your site. There are also two new bid types

  • that will become increasingly popular down the road.

  • The first is CPE or cost per engagement.

  • With engagement ads, the advertiser pays only when a user interacts with the ad

  • in a particular way beyond just clicking on it. These ads are largely video

  • and rich media ads. The other new bidding metric

  • is active view CPM. With active view CPM bidding,

  • advertisers bid on one thousand viewable impressions

  • and only pay for impressions that are measured as viewable.

  • That is when at least 50 percent of the ad is displayed on screen

  • for at least one second. As these new bidding types become more common,

  • we will continue to provide more information on them,

  • including in your AdSense reporting.

  • In this unit, we'll focus on the changes you can make

  • to your ad set-up to attract higher-paying ads from advertisers.

  • We will cover the various settings for your ads and your AdSense account

  • that could have had direct impact on your ad unit CPM and CPC.

Welcome to Unit 1: Understanding CPC

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