Have you ever wondered what is the best way to value your website’s traffic? A popular metric used for quick back-of-the-napkin math is called “RPM” (revenue per mille). It’s a metric used industry-wide and it’s simple to calculate.

Nevertheless, knowing your website’s RPM is only the first step to properly valuing your site. Without understanding industry benchmarks, it’s hard to tell if your RPM is “good enough” or “needs improvement.” Furthermore, there are at least a couple other metrics you can use that may be better in helping you determine the correct value of your site’s traffic.

What is RPM and Why is it Important?

As stated above, RPM means revenue per mille. Mille is Latin for thousand. So RPM means revenue per thousand (pageviews). It is a metric used industry-wide by brokerages, buyers, sellers, and just about anyone who estimates the value of their website traffic. The formula is:

  • Total revenue generated this month / (# of monthly pageviews / 1,000)

This metric is vital for a few reasons. First, it allows parties to do quick math to determine a website’s monthly revenue. For example, if we say that RPMs average at $20, and a seller claims to receive 20,000 visitors a month, we can quickly determine the site is bringing in $400 per month ($20 * 20).

Another reason how RPM is helpful is to determine if a website is under or over performing. Again, assuming the RPM average is $20, and a website is returning $5 RPM, then the owner may want to research what they are missing or doing wrong. It acts as a warning flag that they could be squeezing more value from their asset.

Misconceptions and Caveats About RPM

Let’s just get this out of the way, especially for those new to this metric. Be aware of the following:

  • It says nothing of a site’s users
  • It says nothing of a site’s sessions
  • It is not equal to CPM
  • It varies significantly between niche and monetization strategy
  • It is a blunt instrument with many shortcomings (noted below)

Given these deficiencies, we present alternative metrics you should consider when valuing a website’s traffic.

Industry Average RPM

Finally, to the reason you are here, and the moment we’ve all been waiting for… what is industry average RPM?

According to Richard Patey

Let’s kick off the conversation with the post that initially piqued my interest early this year. This first came on my radar when Richard Patey posted a Facebook poll on this topic. He posed the question, “what $RPM [are] people are achieving here before flipping [their website]?

Richard Patey facebook poll on average RPM, with $60-$100 RPM being the most chosen by far.
Courtesy of Richard Patey

At the time of the poll, almost 20 people completed it, and it appears from the screenshot that most folks answered in the $60 to $100 RPM range. Tied for second was $100-$200 RPM and $200-$400 RPM. Frankly, that’s higher than I expected so either Richard’s followers/friends are absolutely crushing it, or I am seriously lacking in my RPM game. I couldn’t let this one poll get me down so I dug deeper.

In his follow up blog post, Richard states that he manually scraped Empire Flippers website (~500 listings) in early 2020 to discover that the average listing RPM was a bit lower, coming in at a whopping $85 RPM!  That’s much more in line with what I was expecting, but still higher than other research I’ve seen.

According to Hekkup

Richard’s poll then kicked Hektor into full gear — he too wanted to calculate his RPM from his portfolio of more than 30 websites. Hektor published a post in June 2020, which found that his average was $63.25 RPM. He also admits this number is likely lower than it should be because the results were pulled from Q1 traffic, which is notoriously lower, and because many of his sites are brand new. Lastly, he mentions he hasn’t done much conversion rate optimization, so there’s likely a ton of low hanging fruit to be picked to help increase that RPM number.

In my quest to find out more about the RPM average, I knew I couldn’t stop here. Surely there were industry-wide reports or white papers on this topic? For example, the folks over at Onfolio or Flippa are likely sitting on a ton of data. Let’s dig in…

According to Onfolio

Onfolio, led by veteran internet business buyer and seller Dom Wells, has published a lot over the years. Nonetheless, I was not able to find anything specifically from them on RPMs. What I did find was this “Upside checklist” PDF that states you can “add Mediavine [to your site] and expect around [an additional] $10 RPM.  He did note that the traffic needs to be mostly US-based, which is an indication that RPMs are higher for US-based businesses/traffic. This is interesting because it’s additional, not cumulative.

In his youtube interview with Michael Bereslavsky (of Domain Magnate), Dom mentioned that 1 million pageviews (US traffic, high quality) could generate $10,000 a month in display advertising. Using the same mathematical assumptions we laid out in the Empire Flippers section, that’s $10 RPM. That number is aligned with what Onfolio published in their checklist PDF.

Lastly, it’s worth noting that both these examples are for display ads only. If an owner has a website that’s generating revenue from multiple sources already, then the addition of display ads should increase their overall RPM.

According to Flippa

I was hoping Flippa would report their medium RPM in their annual report, but sadly, I could not find it. In one of their articles on buying websites, written by none other than Richard Patey, we learn that “the RPM from Adsense is low, typically $2-$4, whereas, on more premium ad networks where you have to apply, such as MediaVine, you can achieve anywhere from $5 to $30 RPM. Pure affiliate sites can achieve RPMs from $50 up to over $1000 such as promoting software that has recurring commissions that compound every month.”

I’m not sure if RPM is a metric worth calculating if you have recurring revenue (i.e., SaaS) since there are so many other essential metrics worth tracking. Nonetheless, that post by Richard is very informative and worth reading.

Alt text: Chart of all RPM data, source, and notes collected from recent research

What’s missing?

Although RPM is a metric that can be easily used for back-of-the-envelope math to determine a site’s value, I don’t think enough data has been publicly reported to know if it can be used as an accurate benchmark of a website’s valuation. Here are just a few additional factors I’d like to see:

  • Niche-specific RPM. It’s not good enough that we have “medium RPM.”  We need to know what RPM looks like across verticals and niches. The RPM for a news aggregator is going to be much different than for a fashion blog. Knowing the RPM per niche will help us learn which vertical provides greater value.

  • Monetization strategy RPM. A website’s business model definitely affects its RPM, and a better understanding of that correlation will help us know how traffic affects valuation. A product review website (affiliate revenue) will have a widely different RPM than a pure content website (display ads) and even widely different than a subscription service (SaaS). Knowing the RPM per monetization strategy could help know if RPM is even a metric worth tracking for each. 

  • RPM projections. Are RPMs going up? Going down? I’m curious what the trends are indicating. I’ve seen data showing how multiples are increasing, which makes me wonder how RPMs are changing as digital assets continue to increase in value.

  • Better consistency in the data. As you can see from our post, the data is all over the place. We noticed some as low as $2 or $3 RPM to as high as $100+ RPM. Although the medium seems to be floating around $50 to $100 RPM, there just doesn’t seem to be enough data to be conclusive.

Shortcomings of RPM and Better Alternatives

Many have pointed out that there are obvious shortcomings of using RPM as a metric. For starters, Hektor over at Hekkup reasonably argues that “rarely a single metric can tell you the whole story.”  Specifically, with RPM, what happens when “we’ve maxed out on high ticket items in our niche to review. And we’re already ranking highly for the keywords.”  In those cases, each new 1,000 pageviews a site owner adds will be worth less than the previous 1,000 because we’re already tapped out on high-value traffic in our niche.

Earnings per 1,000 visitors (EPMV)

In another piece, Ezoic argues that ad session RPM (EPMV) is a much better metric to use. They state that “basic math tells us that we are missing a big part of the equation if the hope is that increasing these metrics will increase overall revenue.”  They dive into an example showing how if a visitor views one page and makes a purchase vs. another visitor who views many more pages but makes a larger purchase, the latter use case is more revenue for the site owner but overall lower RPM. You’ll have to read the post to understand the math better but suffice it to say, they argue it’s much better to calculate revenue based on sessions, not pageviews.

Cole’s Contant

Ezoic published a similar post months later outlining a talk given by John Cole (Ezoic COO). In the slides posted, John came up with what he calls “Cole’s constant” of $0.17. Like Ezoic, he too leverages sessions and designed this formula: 

  • Monthly sessions * $0.17 = annual earnings
Using the Cole Constant to value websites is an alternative to RPM valuation.
Courtesy of Ezoic

Given the shortcomings of RPM, it’s understandable why site owners may want to use an alternative metric. In fact, I encourage you to track a handful of metrics, not just RPM. That said, other metrics are beyond the scope of this article so let’s stay focused!

A Final Note & Question

Most of what you’ve read above should be taken with a grain of salt. Some of the data is self-reported, while others were calculated quickly without much regard to sample size or controlling for individual variables. The key takeaway is that RPMs range in size depending on how efficient the owner is about running their website.

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Benjamin Hoffman

Benjamin Hoffman is a growth engineer, investor, and lawyer. His millennial ADHD allows him to have a handful of interests, from writing code to buying websites to reading K1s. When he's not helping startups grow, he's optimizing his own sites or investing in others. He is a proud believer in science, data, and facts and is still confused when did this become a controversial viewpoint in America. You can find more of his musings on GrandCruCapital.com.