A GUIDE FOR WEBSITE PUBLISHERS: HOW TO MANAGE + MONITOR YOUR AD REVENUE METRICS

INTRODUCTION

Key Points

• Knowing which ad revenue metrics to monitor, and how frequently to look at them, is the first and foundational step in maximizing ad revenue.
• Learn as much as you can about each of the most important ad metrics to effectively track advertising revenue and alert yourself to future revenue drops (or opportunities for increased revenue).
• Find out how to dig deeper into each of these metrics to diagnose problems.

In today's era of data overload, knowing which ad revenue data is most important to cut through the noise can be challenging. This guide breaks down exactly which key advertising metrics you should look at, and how to benchmark your success on each. This will help you:

1. Catch issues that will result in major drops in revenue before they have the chance to create huge losses.
2. Identify opportunities for optimization that can steadily help you improve your yield and maximize total revenue.

Now, let's dig into the metrics!

DEFINITION OF PAGEVIEW CPM

Pageview CPM (PV CPM) is the total amount of money advertisers spend on ads on your website over a given period, divided by the number of page views over the same period. Then multiply by 1,000 to get an effective pageview CPM. 

DEFINITION OF PAGEVIEW RPM

Pageview RPM (PV RPM) is the gold standard ad metric for ad revenue for publishers. To get this amount, you’ll take your total ad revenue over a given period, divide it by your number of page views over the same period, and then multiply by 1,000 to get an effective pageview RPM. 

HOW TO USE PAGEVIEW CPM AND RPM

These two advertising metrics are the most important a publisher will track to get an immediate read on performance in a given time. This metric helps to remove any effects of increases in page views (which is still great!) from your calculation to help you truly understand how your ads are working or improving. 

Why is Pageview CPM/RPM important? It should give you a very clear picture of how your ads are performing in relation to their typical performance, and be the leading indicator you look at which should help ensure your total ad revenue or take-home will be what you expect. 

How often should you check Pageview CPM/RPM? Every. Single. Day. Even multiple times a day. You should be comparing this metric day over day, week over week, and month over month. You should know the expected seasonal variations in this metric across the course of a single day, week, month, and year-long cycle like the back of your hand. 

What are you looking for? The percentage change in this metric should be able to give you a pretty obvious “red, yellow, green” indicator of what to do when you see it.

• Red: More than a 10% decrease in pageview RPM/CPM should set off alarm bells and immediately cause you to dig down and figure out if something is “broken” somewhere in your setup or if there is an issue with demand somewhere along the ad call chain.
• Yellow: A 0% change down to a 10% decrease in pageview RPM/CPM is an indicator that you should be digging in deeper and looking for a cause of the decrease, but is not an alarm bell that the world is ending. You should definitely look into it, but it is not necessarily uncommon to see a decrease within the realm of 10% due to normal seasonality.
• Green: Anything that represents an increase in this metric is all good! Large increases definitely merit investigation to see what caused an improvement (so you can do more of it!).

PAGEVIEW CPM/RPM VS. JUST STANDALONE CPM

Why separate pageview CPM from just a standard notion of average CPM? Because looking holistically at your pageview CPM helps to remove any effects of increases in page views from your calculation to help you truly understand how your ads are working or improving. 

Increases in pageviews, while great for your total revenue and a very important metric to track, will naturally change your CPMs. This makes it very difficult to determine what is affecting your CPMs (between either a change in the number of users or your ad monetization settings). 

Separating the two metrics allows you to more effectively understand your ad performance, separate from the performance of your website in terms of viewership. That way you can strategically determine where you need to focus and how to improve each item to maximize total revenue.

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Need more guidance? Visit The Complete Ad Revenue Resource Center.

Definition of Session CPM

Session CPM is calculated by adding all of the money advertisers have spent on your site in a given period, dividing that by the sum of user session times over the same period, and then multiplying that by 1,000. This metric is crucial for understanding how ad campaigns perform during each user session. 

Definition of Session RPM

Session RPM, another gold standard in terms of publisher ad revenue metrics, is calculated by adding up all of the ad revenue you’ve earned in a given period, dividing that by the sum of user session times over the same period, and then multiplying that by 1,000. This helps in assessing the revenue generated per user session, providing insights into maximizing ad revenue. 

How to Use Session CPM and RPM

Session CPM and RPM are both very helpful in understanding how each user session, regardless of the total number of sessions, affects your total ad revenue.

Why is Session CPM/RPM important? Similar to pageview RPM, this ad metric should give you a very clear picture of how your ads are performing in relation to their typical performance, and be one of the leading indicators you look at which should help ensure your total ad revenue or take-home will be what you expect. 

How often should you check Session CPM/RPM? Depending on the type of website you have, and how much you expect your user experience to change, you may look at this as frequently as pageview RPM, but likely you’ll check it closer to weekly. Regular monitoring helps in maintaining higher ad revenue by quickly identifying any issues. 

When should you be concerned? The “red, yellow, green” indicators for this metric are the same as pageview RPM:

• Red: More than a 10% decrease in session RPM/CPM should set off alarm bells and immediately cause you to dig down and figure out if something is “broken” somewhere in your setup.

• Yellow: A 0% change down to a 10% decrease in session RPM/CPM is an indicator that you should be digging in deeper and looking for a cause of the decrease, but is not an alarm bell that the world is ending. You should definitely look into it, but it is not necessarily uncommon to see a decrease within the realm of 10% due to normal seasonality.

• Green: Anything that represents an increase in this metric is all good! Large increases merit investigation to see what caused an improvement (so you can do more of it!).

Session CPM vs. Pageview CPM

Both pageview and session CPM are important metrics. Looking at the difference between these two metrics is often valuable for identifying major changes in user experience that change the way users behave on your website. Understanding these differences can help in maximizing revenue and ensuring that your ad placements are optimized for engaged users.

Once you’ve looked at your “high-level” or website-wide metrics like pageview and session CPM, you may start digging down to the ad unit level to check on the performance of individual ad units. 

Often, digging into ad unit CPM is relevant when you see a major change in pageview CPM or session CPM to determine if an individual ad unit seems to be the primary cause of the shift in the high-level metric.

Definition of Ad Unit CPM

Ad Unit CPM is calculated by adding all of the money advertisers have spent on a particular ad unit in a given period, dividing that by the total number of ad impressions of that ad unit over the same period, and then multiplying that by 1,000. This metric helps in assessing the revenue generated by specific ad units. 

Definition of Ad Unit RPM

Ad Unit RPM is calculated by adding up all of the ad revenue you’ve earned from a single ad unit in a given period, dividing that by the total number of impressions of that ad unit over the same period, and then multiplying that by 1,000. This helps in understanding the revenue generated per ad unit impression. 

How to Use Ad Unit CPM and RPM

You’ll want to dig into ad unit CPM at least a couple of times per month to ensure each of your ad units is maintaining performance or improving. This involves evaluating the ad placement and ensuring that each unit is optimized for higher ad revenue. You’ll want to make sure you are considering the relative volume of each ad unit when reviewing this data. 

You might end up with something that looks somewhat like the table below when reviewing this data (numbers are purely random to demonstrate the math in the table):

Now that you’ve gathered the information, what you are looking for is major changes in the CPM of individual ad formats when compared over different periods. In this instance, you can see that ad units 2 and 3 drive much higher percentages of total revenue than units 1 and 4, so you’ll be more concerned with major changes in CPM on those units.

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Need more guidance? Visit The Complete Ad Yield Management Resource Center.