CPM<\/strong> is a price advertisers bid or pays for each 1000 ad impressions.<\/p>\nCPM = (Total cost of ad campaign \/ Number of ad impressions) x 1000<\/i><\/p>\n
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For example, a\u00a0Publisher sold 1M ad impressions to an Advertiser for 1000$. That makes 1$ CPM the Publisher gets. In another way, that Publisher earns 1$ for every 1000 ad impressions they sell to that same Advertiser.<\/p>\n
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There is also the term eCPM<\/strong>, which illustrates the publisher’s ad revenue from selling 1000 ad impressions. It stands for effective-cost-per-mille. Since each ad impression is up for bid by a number of advertisers at various CPMs; the price isn’t set. Hence, eCPM is how much ad revenue the publisher has generated on average from 1000 ad impressions.\u00a0<\/strong>It is calculated like so:<\/p>\neCPM = (Total ad revenue \/ Total ad impressions) x 1000<\/i><\/p>\n
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<\/span>Reasons for poor CPM:<\/span><\/h3>\n<\/span>1. Seasonality or unfavorable market conditions<\/span><\/h4>\nAt the time of publication (Q1 2023), the world is facing economic headwinds that the digital advertising industry is surely affected. The situation causes a slight decline in Advertisers’ ad spending and in Publishers’ eCPM.<\/p>\n
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In addition, the average CPM may vary in different seasons of the year. Advertisers tend to spend more in the last few months of the year like in Q3 and Q4 when it’s the holiday season with many events and special days.<\/p>\n
For example, the highest spending period for Advertisers mostly falls in December with many events and holidays – Christmas, Black Friday, Boxing Friday,… or when there is the season of football tournaments (FIFA World Cup, English Premier League,…). Additionally, Q1 is when Advertisers usually take a moment to cool down after spending their budget extensively in Q4 so it is the slow season with low CPM.<\/p>\n
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<\/span>2. Low match rate<\/span><\/h4>\nMatch rate implies the percentage of ad requests that received a response from an ad source. Reasons for low match rates can be diverse. It mostly means fewer available users to target, which eventually affects converters and Publishers’ revenue.<\/p>\n
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<\/span>3. Traffic quality<\/span><\/h4>\nTraffic quality is evaluated based on several factors.<\/p>\n
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First, the mobile game\/app or website can be developed and targeted in different countries which will bring different levels of traffic quality. Typically, the traffic coming from highly developed countries namely USA, UK, and Canada,… is seen as high-quality traffic since the population tends to spend more and it is stricter in content censorship; second-tier GEOs bring medium-quality traffic are countries like Spain, South Korea, Brazil,… If a game\/app or website has a low average CPM over time, it can be that most of its traffic is coming from Tier 3 countries – India, Laos, Sri Lanka,… CPM in tier-3 countries tends to be the lowest since these countries though easy to convert, have the lowest payout.<\/p>\n
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Second, high bounce rate – a large percentage of visitors land on a website and without moving on to another page, quickly exit the website in just a few seconds. The high percentage shows the content or gameplay doesn’t meet the visitor’s or users’ intention. The less time a user spends on the game, the lower CPM the Publisher gets.<\/p>\n
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Third, bot traffic aka bad traffic. Some Publishers like to go “below the belt” by purchasing traffic from external sources. This may increase overall traffic but these bots don’t ever interact with the ads, which means low CPM for Publishers.<\/p>\n
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<\/span>4. Ad placements and formats<\/span><\/h4>\nThe user experience should be put on first above all since they are the ones to increase revenue for Publishers. Hence, flooding them with too many ads or giving them a hard time distinguishing whether a part is an ad or content will increase the bounce rate. In addition, ad formats like interstitials usually block user views and leave them no content to see. Displaying ads in high frequency brings similar results, which increase bounce rate and decrease engagement, hence lower traffic, and lower CPM.<\/p>\n
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<\/span>5. Not enough or not well-suited monetization partner<\/span><\/h4>\nFor Publishers, it is recommended to integrate more than one monetization platform. One ad network or exchange integration simply does not always have enough demand to fill in a large Publisher’s inventory. This will also affect the fill rate and ultimately, revenue.<\/p>\n
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Choosing the right monetization partner is also an important element of revenue. A monetization partner who is inexperienced in AdOps, or has bad targeting features, and ad quality control can risk lower CPM.<\/p>\n
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<\/span>What to do to increase CPM?<\/span><\/h3>\n