CPM: What Causes Fluctuations In CPM and How You Can Fix It?
CPM is one of the important advertising metrics and stands for cost per mille. The meaning of CPM is cost per thousand impressions (impressions meaning how many times it is seen). In simpler terms, it is the cost of publishing an ad and being seen a thousand times on a website and it is used to monitor ad performance. CPM has been an industry standard that is used to determine advertising costs and pricing web ads since the beginning of online marketing campaigns.
If you want to calculate CPM of your campaigns, you will have to multiply the total impressions by the CPM rate and then divide it by one thousand. For example, one million impressions at CPM is equivalent to $1000 in gross revenue.
Why Do Publishers Prefer Working With The CPM Model?
The answer to this question is rather simple. In the CPM model, users do not need to engage with the ad for the publisher to get paid. But it is not the only reason for publishers to choose CPM. Some of the other reasons are as follows:
- It helps you in understanding the quality of your traffic- if your quality of traffic is good then your profit will increase.
- It provides you insights on SEO- when you start to monetize your traffic you can check through your cabinet the countries/devices/operating systems etc are highly paid by advertisers. After knowing this, you can then invest your money and efforts on the slices of traffic that are performing the best.
What Are The Common Reasons For CPM Fluctuations And The Ways To Fix Them?
Most marketers would have noticed that the volume of impressions are not always the same. And there is nothing wrong with it. You will understand this when you will know the reasons why your CPM fluctuates.
But we have got the solution to these problems as well. So fasten the seat belts and ride with us to know everything about CPM fluctuation and its solution!
#1 You Are Targeting Anti-AdBlock Traffic
If you have just begun targeting Anti-AdBlock traffic you need to keep in mind that advertisers tend to pay less for users that have Anti-Ad Blockers which further lowers your overall CPM rate. The reason behind is that the Anti-AdBlock is considered an additional way to monetize all the traffic you have got.
It started from the belief that users were not interested in receiving ads, so their engagement rate might be comparatively lower than the rest of the users. However, upon testing it showed that this traffic is as reactive as the others. And even if you might observe a slight drop in the overall CPM that advertisers are paying you, eventually the money keeps on adding.
The lower CPM is majorly because of the lower volume of Anti-Ad block traffic as compared to the regular traffic. So when you will check your cabinet, you will observe a lower CPM, but a higher profit than without it, although it is not always the case.
#2 Your Ad Frequency Is Not Working In Your Favor
If you think that more ads means better payout then you are heartbroken. If your ads are shown to users too often chances are they will start considering it as a span and they will end up being immune to your ads and ignoring them just as they do to other uninteresting information. This will in turn drop your CPM.
On the other hand, if your ad frequency is too low, there are chances that they never come across your ads. So ensure that you have done all your research. For instance, keep yourself updated with the optimal frequency of your traffic. Whether it is high or low, it is adjusted accordingly. If not, your passive income risks turning into a passive waste of money and your efforts.
#3 Inappropriate Ad Placement
There are two things that you should keep in mind when it comes to placement of your ad. The first thing is the page where the ads are being displayed. If you are not getting a good amount of traffic there, clearly no one can see those ads and your CPM will drop. So ensure that you run some analytic tools to identify the pages where you have the most visitors, if you want to have a good CPM.
Second thing is that the placement of your ads on the page might not be the best. You can use Heat Maps which will help you recognize the exact position that draws most of the views, or the place with the most user activity. In this way, you can move your ads on the page, and improve your CPM.
Besides, an Account Manager can also help you in the best placement of your ads.
#4 You May Encounter Unexpected Situations
In 2020, the world witnessed the first-ever pandemic in over 100 years, and nations across the globe saw the destructive effects on some niches like travel. These situations are completely unpredictable and often we are not prepared for it.
The pandemic even managed to help boost the CPM of many websites. For instance the websites that posted COVID-19 news.
However, on the contrary, the webmasters that did not post anything on sport streaming websites because of all the cancelled events experienced a dip in their CPM rather than increase.
When such situations head your way, you just need to take a deep breath and come up with a recovery plan.
#5 Unpredicted SEO Problems
When you are monetizing your website traffic, there are some things you need to check at regular intervals. If you fail to do so, you might experience a sudden drop in the volume of users that are viewing ads which will further dip your CPM. Mentioned below are some of the SEO changes that can lower your traffic if you are not taking measures against them:
- Google has listed you in its abusive notification list for displaying malicious content. You can go through the abusive notification report and remove all the malicious content and request a revaluation from the Google Search Console (GSC).
- Chances are Google has given you a manual penalty- you need to read the GSC Manual Actions, from the Search Traffic menu. You should carefully analyze only the organic traffic, and if you come across any penalties, remove the problems specified in the GSC Manual Action message(s).
- The problem is with your website speed- verify it in the Google PageLoad Insights.
- There is a change in the Google Algorithm- many times it leads to traffic loss and your CPM getting lower. And the challenge here is that Google doesn’t even announce these updates. So you need to ensure that you are diagnosing your traffic timely.
#6 Other Technical Issues
There are some things that contribute to CPM fluctuations like using the same tag everywhere, messing up the ad script altogether. Though these are petty mistakes, sometimes experienced users can make these mistakes too.
#7 Your Content Needs Remodelling
There could be many reasons behind it. You have probably changed your content and it doesn’t match with your traffic expectations anymore. And if your traffic volume is falling, then your CPM no doubt will drop.
Similarly, it also happens when you don’t update your content. This specifically happens to the platforms that have a demand for content, for example news websites. When there is a new show or some breaking news, your traffic has an expectation to see it on your platform.
And if you don’t deliver the content, the traffic will go somewhere else causing a drop in your CPM and you will lose money.
The opposite also stands true, if you post something and it goes viral, it will eventually cause an increase in CPM as advertisers will have more traffic to purchase from you.
#8 Seasons And Trends Have An Impact On Your Website Category
Research suggests that trends have an impact on the CPM of some websites. For example, CPM tends to increase in the Christmas holiday season or sporting events for sport sites or there was an increase in CPC of the websites posting news during the pandemic and lockdown.
So it is important to keep your websites updated with the content and keep posting what people are looking for. And if you don’t keep up with the trends, your CPM will fluctuate. Specifically if you have a niche website and you do not upload the content according to the theme.
#9 Quality And Type Of Traffic Can Result In CPM Fluctuation
Poor quality of traffic can result in your CPM rate to fall. So you need to ensure that you check how your users interact on your website, or the bounce rate. It will tell you the number of pages your users visit, or the actions they take. When you have all the information it helps you in identifying the problems.
Besides, if there is a sudden change in your traffic, your CPM will react. For instance, if earlier you had a lot of Android traffic and now you are getting more iOS users, this will show in your CPM. For that matter, iOS users are some of the most well-paid for traffic and your CPM rate is likely to increase.
#10 Different GEOs Have Different CPMs
Just like the traffic type, the GEOs also have an impact on CPM rates. If your traffic is majorly coming from low-paying GEOs, it will lead to a lower CPM rate. You can observe these changes during your ads testing period. However, you should continue checking it for future changes.
Another important thing that you should not forget is that Tier 3 countries can bring higher volumes but their CPM is likely to be lower. On the other hand, Tier 1 countries can bring lower volumes but will pay better CPM.
#11 Advertisers Also Have An Impact On CPM
A lot of times, advertisers can decide to cut campaign budgets or close them entirely or redirect their finances towards the others that are performing better. Or your traffic sources may no longer be attractive to them. Whatever the reasons there might be, it will cause a fluctuation in CPM.
How Can You Monitor CPM?
The first step is to carefully analyze your traffic. It doesn’t matter the platform you use, your results will pretty much be the same. You can calculate CPM by:
CPM= 1000xProfit/ Impressions
You can use filters to see exactly where the drop or increase happened in your CPM and take some actions like:
- If CPM drops- you can take measures to avoid it in the future
- If CPM increase- you can push more traffic here to gain more money