There are plenty of ad-selling techniques a publisher can use to monetize their website. However, if you’re not tracking the right metrics, then how do you determine what’s working and what isn’t?
One of the metrics you need to track if you want to improve your ad revenue is your eCPM. Your eCPM is actually one of the most important revenue metrics out there, however, it’s very easy to get it confused with other revenue metrics.
That’s why so many publishers often go without tracking their eCPM — which is exactly why we’re going to talk about what it is, how to calculate it, and how to optimize it to increase your earnings.
Let’s dive in.
What is eCPM and why is it important?
eCPM is short for “effective Cost Per Mille.” The Mille part is Latin for one thousand, and the estimated part is an indicator of real value compared to the projected value.
This would make eCPM the representation of your total ad revenue generated per 1,000 impressions. Therefore, the higher your eCPM, the more revenue you’re earning from your ad units.
Additionally, your eCPM can help predict your future earnings. Think of it as an earnings target that allows you to adjust your method of ad selling to set accurate benchmarks and reach more tangible goals in terms of monetizing your website.
For example, if you’re conducting an ad test to figure out which ad units on your site work best, you can calculate the eCPM for each ad test to help you choose the highest performer.
It’s important to keep in mind that as a metric, your eCPM does two things: It shows actual revenue generated from recent ads and serves as a prediction. This means that your actual future earnings will likely vary.
eCPM vs. CPM
It’s easy to confuse eCPM and CPM, especially since they’re often mistakenly used interchangeably.
Put simply, CPM is short for “Cost per Mille.” However, this metric is something that advertisers use to monitor their cost per 1,000 impressions whereas eCPM is used by publishers to predict earnings per 1,000 impressions.
eCPM vs. RPM
eCPM is also very similar to the RPM metric. RPM is short for “revenue per thousand impressions” and it’s also used to help predict ad revenue.
However, RPM focuses on pageview-level earnings, meaning that it gives publishers a heads-up regarding the revenue they can expect to earn per 1000 impressions per page. This involves several factors including the number of pageviews, ad units, the ad fill rate, and viewability score, among other things.
You’ll find that eCPM and RPM are often used interchangeably by most ad networks. Arguably, the primary difference is that RPMs offer deeper insights into how your ad metrics are performing.
How to calculate your eCPM
Your eCPM can be calculated using the following simple formula:
eCPM = (Total Earnings ÷ Total Impressions) x 1,000.
So, let’s say that your website is generating 100,000 impressions each day. After about a week, your calculations are telling you that you have an eCPM of $3.50. This means that for the 100,000 impressions you’re generating each day, advertisers are paying out approximately $350.
Therefore, each impression earns you $3.50. If this remains consistent over a 30-day period, then you’ll end up making at least $10,500 each month in ad revenue.
How to increase your eCPM
If your goal is to increase your eCPM but you aren’t sure where to start, try the following optimizations:
1. Increase your site traffic
You can’t generate ad impressions without user traffic. Therefore, the higher your visitor count, the more likely your ad impressions will increase which equates to more revenue.
The key is to focus on your search engine traffic. In other words, you want to put out high-value content that your users will want to see. When you have content that offers valuable information in terms of what they’re searching for, they’ll stay on your page longer. This increases the likelihood of your users viewing your ads compared to a website that has subpar content.
One insider tip into generating more organic traffic is by leveraging your social media channels to drive users towards your website. Just make sure that your content is worthwhile, otherwise, you run the risk of disappointing your visitors which will increase your bounce rate.
2. Add more SSPs to your ad tech stack
Sell-side platforms (SSPs) take what ad networks do to another level. While ad networks work to bring publishers and advertisers together by acting as an intermediary that appropriately allocates ads for each demand, SSPs work with various ad networks and ad exchanges to maximize your demand sources.
In other words, they can gather more bidders for your ad inventories which will increase your overall eCPM. They can also help you to deliver a better user experience and improve your ad stack in addition to your demand. Take a look at the best supply-side platforms for publishers as a starting point.
3. Optimize your ad viewability score
Once again, users need to actually see your ads if you want them to count as an impression. Viewability is one of the most important variables that advertisers look for when purchasing ad inventory. As a publisher, you need to work on your viewability and try to outsmart banner blindness.
Here are 8 ways for you to optimize your viewability score:
- Focus on above-the-fold placements (excluding top-of-the-page placements)
- Choose ad sizes that outperform on viewability
- Measure and improve Core Web Vitals
- Work on reducing your bounce rate
- Optimize your header bidding stack
- Start lazy loading your ad units
- Use sticky ads and adhesion units (in moderation)
- Refresh ads that pass the viewability criteria
4. Test different ad formats
It can be challenging to get a hang of changing up your ad formats, but it’s more than necessary considering that several different devices, operating systems, and even browsers come into play. If you simply follow a standard set of ad formats, your ads won’t get the reach they need to increase your eCPM.
Here are a few to try out:
- Banner ads: which serve as a permanent fixture on a website.
- Interstitial ads: they take up the entire screen of the user’s device, which guarantees an impression.
- Video ads: you can offer the option for users to skip over them or make them compulsory. Be sure to choose the one with the highest fill rate and lowest instances of fraud.
5. Improve your user experience
Almost everything comes down to the user experience. If a user visits one of your web pages but gets bombarded with ads, they’re going to leave almost immediately. When this happens, your bounce rate increases, which results in your website moving further down the ranks in the search engine results pages (SERPs).
Bombarding users with ads not only provides for a terrible experience, but it’s also usually what makes them turn to adblockers, which reduces your eCPM. To ensure a better user experience, ensure you’re placing your ads in a way that works seamlessly with your content so they don’t interrupt or hinder the user in any way.
Ultimately, if you want to increase your eCPM and your other ad metrics, you must cater to the user experience. That means working with the right SSPs and ensuring that your website is full of content that offers value and has a layout that’s easy on the eyes, so to speak.
While you're here...
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