A GUIDE FOR WEBSITE PUBLISHERS: HOW TO MANAGE + MONITOR YOUR AD REVENUE METRICS
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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:
- Catch issues that will result in major drops in revenue before they have the chance to create huge losses.
- Identify opportunities for optimization that can steadily help you improve your yield and maximize total revenue.
Now, let's dig into the metrics!
Table of Contents
Pageview CPM/RPM
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.
-- Guide Continues Below --
Need more guidance? Visit The Complete Ad Revenue Resource Center.
Session CPM/RPM
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.
Ad Unit CPM/RPM
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):
Ad Unit |
Impressions |
Revenue |
CPM (Revenue / Impressions x 1,000) |
Percentage Contribution (Total # of Ad Impressions / # of Unit Impressions) |
Unit 1 |
10,000 |
$5.00 |
$0.50 |
2.7% |
Unit 2 |
200,000 |
$1,000.00 |
$5.00 |
54.6% |
Unit 3 |
150,000 |
$1,200.00 |
$8.00 |
41.0% |
Unit 4 |
6,000 |
$150.00 |
$25.00 |
1.6% |
TOTAL |
366,000 |
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.
-- Guide Continues Below --
Need more guidance? Visit The Complete Ad Yield Management Resource Center.
Effective CPM
Definition of Effective CPM
Effective CPM (eCPM) just takes standard CPM and multiplies it by the fill rate. Thus, the formula is the total amount spent on ads by advertisers in a given period, divided by the number of ad impressions over that period, multiplied by 1,000, and then multiplied again by the fill rate.
This metric is essential for understanding the revenue generated from filled ad impressions and optimizing ad placements.
How to Use Effective CPM
Effective CPM helps to control unfilled ad impressions. When an ad impression goes unfilled, it means there’s no revenue coming in for that impression. Thus, effective CPM helps to remove that effect from CPM calculations.
This is especially useful when looking at how ad units are performing over time and ensuring higher ad revenue. Let’s take the table from the previous section about Ad Unit CPM and add information about fill rate to see what changes:
Ad Unit |
Impressions |
Revenue |
Fill Rate |
CPM (Revenue / Impressions x 1,000) |
Effective CPM (CPM x Fill Rate) |
Unit 1 |
10,000 |
$5.00 |
66% |
$0.50 |
$0.33 |
Unit 2 |
200,000 |
$1,000.00 |
88% |
$5.00 |
$4.40 |
Unit 3 |
150,000 |
$1,200.00 |
76% |
$8.00 |
$6.08 |
Unit 4 |
6,000 |
$150.00 |
50% |
$25.00 |
$12.50 |
TOTAL |
366,000 |
Comparing effective CPMs of each ad unit over different periods can quickly alert you to a major change or drop in fill rate, which could indicate something is broken with your ad unit setup. This metric is crucial for measuring ad performance and ensuring advertisers pay for quality impressions.
IVT
What is Invalid Traffic (IVT)?
Invalid traffic, or IVT, is a metric that measures the percentage of ad impressions believed to be from bots or “non-human” sources of traffic. This is crucial for understanding the quality of your ad metrics and ensuring that advertisers pay for genuine interactions.
Why is IVT Important to Publishers?
IVT is typically a metric used heavily by advertisers to measure inventory quality. Inventory with a high IVT percentage indicates that buying that inventory will result in a lot of wasted spend, as many impressions of the advertiser’s advertisement would be wasted on non-human traffic.
Thus, as a publisher, high IVT readings on particular ad units will result in much lower CPMs, affecting your overall ad revenue and revenue generated.
How to Measure IVT
IVT is typically measured by tools paid for by advertisers, like MOAT or other Media Rating Council (MRC) accredited tools. To get this reading, publishers would either need to purchase a subscription to a tool like MOAT or use a publisher management system that provides the measurement for them (like Playwire’s RAMP® Platform). This helps identify ad impressions that might not be contributing to maximizing ad revenue.
How to Use IVT
We recommend checking IVT at least once per month to catch any major increases in IVT. Changes in IVT usually signal issues with your website traffic more than anything else, but it is important to check into it and see if you can remedy the issue. This ensures that your ad monetization efforts are not compromised by invalid traffic, thereby preserving your advertising revenue.
Viewability
What is Viewability?
Viewability is a measurement of how many ad impressions were actually in view when served. Viewability is calculated by taking the number of impressions measured as “in-view” divided by the total number of ad impressions.
Why is Viewability Important to Publishers?
Similar to IVT, viewability is primarily used by advertisers to determine your inventory quality score. It is used to avoid wasted ad spend on impressions that aren’t even in view of a user.
Thus, as a publisher, poor viewability readings on particular ad units will result in much lower CPMs, impacting your overall ad revenue.
Keep in mind that if you are trying to make a major jump in viewability (from 5% to 70% for instance), it will initially cause a pretty big drop in revenue. Stair stepping is also not the greatest option, as a change from 5% to 20% viewability will not have a major effect on improving results (since viewability is still far below the desired level for advertisers).
So, essentially you have to decide if you want to go big or go home, and if you want to go big you’ll have to accept the short-term revenue impact. Choose wisely when you make major changes to improve viewability, and do it with the knowledge of what effects it will have in the short term.
How to Measure Viewability
Viewability is typically measured by tools paid for by advertisers, like MOAT or other Media Rating Council (MRC) accredited tools. To get this reading, publishers would either need to purchase a subscription to a tool like MOAT or use a publisher management system that provides the measurement for them (like Playwire’s RAMP® Platform).
Google Ad Manager (GAM) does have some ability to estimate viewability; however, advertisers will always use MRC-accredited tools to measure it. There are often large discrepancies between GAM’s reading of viewability and MOAT’s, so knowing your viewability readings from an MRC-accredited tool is very important (as that will be the source of truth for advertisers bidding on your inventory).
How to Use Ad Viewability
You’ll want to do a couple of things with this information:
- Improve Low Viewability Ad Units: Systematically improve your viewability on the ad units where you have low viewability. Focus on ad placements that have a significant impact on revenue generated.
- Track Changes in Viewability Over Time: Try to catch any major viewability changes right away. Major drops in viewability should signal you to check in on your setup and look for things that are broken. This is important for maintaining steady ad revenue and optimizing user engagement.
By focusing on these aspects, you can ensure that your ad monetization efforts are effective and that you are maximizing the potential of each ad unit.
Ad Calls per Page View
Definition of Ad Calls per Pageview
Ad Calls per Pageview, also known as Requests per Pageview (Req/PV), measures how many times you attempt to fill an impression on a single pageview.
To calculate this, divide your total number of ad calls or ad requests over a given period by the number of page views in the same period.
This metric is crucial for understanding the efficiency of your ad network and ensuring that your ad placements are optimized.
How to Use Ad Calls per Page View
This metric is especially important for identifying if something is broken with your setup. Often, an issue with ad yield isn’t even an issue with ads at all, but the result of a major change in user behavior or site traffic. This metric helps in identifying such issues and ensuring higher ad revenue.
If you see a huge difference in the number of ad calls being made per pageview compared to historical data, it indicates that something might be off in the user experience or site configuration. It’s time to investigate and ensure that your ad monetization efforts are not being hindered by technical issues.
We recommend checking this metric at least a couple of times per month and comparing it to historical information. This proactive approach helps in maintaining advertising revenue and optimizing user engagement.
What to Do with All These Ad Revenue Metrics
These ad revenue metrics are designed to create a framework for identifying issues before they result in major losses in advertising revenue. They should be checked frequently, with specific recommended frequencies noted for each category. Once you notice an issue with one of these metrics, it’s time to investigate!
Think of it as a detective story — your mission is to uncover what tiny cog in the system has broken before it causes your revenue to suffer. Use detailed and granular analytics to delve into each ad unit, demand source, content type, conversion rate, user engagement metrics, and more. By combining all these metrics, you can pinpoint what's wrong or identify areas for improvement.
By leveraging these insights, you can ensure your ad monetization strategy is effective and continuously work towards maximizing revenue. This involves not only identifying issues but also uncovering opportunities for ad optimization and enhancement.
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