It’s not enough to just serve ads on your website and wait for the profit to flow in. To generate consistent revenue from ad monetization, publishers must regularly optimize their content and keep their website metrics on an upward trend. While sometimes unavoidable, a CPM drop can be quite detrimental to publisher revenue and can happen for several reasons. Even so, there are actions publishers can take to soften the blow to their profit.
Your Ad Density Is Off
CPM drops can happen due to the number of ad placements on a website. A general rule on ad density, established by the IAB, is that ads shouldn’t take up more than 30% of the page. Too many ads on your website can cause ad fatigue and lessen user engagement. With less traffic, you’ll receive fewer ad impressions. Similarly, having too few ads on your website can heavily impact your revenue potential.
Limit Ad Frequency
To prevent ad fatigue, publishers should keep ad placement within the industry guidelines. They should also limit the number of times an ad appears on the user’s screen. Many ad servers offer the option to set frequency caps for ads displayed on websites or apps. This way, publishers can also improve user experience.
Expand Your Inventory
Not having enough ads on your website/app can also pose an issue. If a publisher doesn’t have available ad inventory within the web page or video content, i.e., fewer ad-serving opportunities, they should incorporate additional ad units. TargetVideo’s in-slide ad unit, which appears in the corner of the user’s screen, is an excellent way to expand inventory without disrupting the user experience.
Your Ad Positioning Is Off
Ad positioning can affect ad viewability and potentially lower ad impressions. For instance, if you have low completion rates, incorporating post-roll ads into your video content is pointless. Similarly, putting ads on pages that don’t have a lot of traffic or pages where ads would overlap with your content due to the page layout is a waste of resources.
Reevaluate Your Ad Placement
To maximize potential revenue from ads, publishers should review their websites and consider which ad slots perform best in terms of ad impressions. Ad placements with high viewability rates, for example, ATF (above-the-fold) ads, should be the priority. In addition, publishers should use ad formats that match their content and website design. For instance, if a publisher has a lot of video content, they should focus on instream video ads. On the other hand, If they have a lot of textual content (blog, articles), they should incorporate native ads that seamlessly blend with their web page content.
Seasonal CPM Drop
Depending on your audience and website vertical, CPM can fluctuate seasonally due to website traffic. For instance, when popular sporting events start, traffic will increase for sports websites. As a result, advertisers will also increase their ad spending. However, these seasonal fluctuations can also lower your CPM. One of the most critical times during the year is the January slump. Publishers most frequently experience CPM drops during this period since advertisers heavily spend their budgets around the Christmas season and then pause their campaigns to reduce spending in the following month.
Lower Price Floors
One of the ways to combat the January slump is to lower your price floors. Lowering price floors will attract more advertisers, especially those with lower-budget campaigns, to participate in your auctions. This way, your ad fill rate will remain consistent until the season ends. While you may be profiting less than usual, you’ll have a steady revenue stream which is better than nothing.
Diversify Your Ad Sources
A viable solution to CPM drops is employing multiple ad networks. Relying on only one ad source is generally not a common practice in the industry. In particular, during the January slump, having ad demand from multiple sources can help you maintain a stable profit and keep the competition for ad placement at a high level, leading to less falloff.
Wait It Out
These seasonal CPM drops are only temporary, so another way to deal is to just wait for the season to pass and focus on the following months.
Global Events
Global events, such as the COVID-19 pandemic, can lead to CPM drops. Publishers in particular verticals such as news sites saw a boost in their CPM rates during the pandemic, as users flocked to their sites to keep up with the global situation. However, many others experienced a drop due to advertisers cutting ad spend (e.g., traveling verticals). For these unpredictable CPM drops, the approach is similar to seasonal, diversify your ad streams, lower your price floors, and wait to see what happens next.
Poor Choice of Ad Network
Choosing an ad network with low-quality ads, slow payment, inappropriate content, questionable partners (ad fraud), or just ad formats that don’t align with your web page content can cause CPM drops. To avoid this, conduct thorough research and due diligence. Assess the network’s reputation, track record, and reviews from other publishers. Additionally, ensure that the ad networks you opt for are compatible with each other, and test and keep track of their performance.
Issues With Your Content
If your content quality falls off, your website traffic will also decrease considerably, making your ad inventory lose its worth. The most common reason why users lose interest is serving outdated, uninteresting content.
Improve Content Quality
To improve the overall quality of their website content, publishers should conduct a comprehensive audit of their content and single out what needs to be updated and changed. Optimizing SEO is also a great way to draw in new audiences.
Poorly Optimized Header Bidding
CPM drops are often a result of poorly optimized header bidding. To prevent any losses, publishers should regularly optimize their header bidding. This process requires continuous monitoring and testing (setting the best price floors and managing ad sources). For instance, avoid placing low-quality SSPs among the first calls, as you won’t receive quality ads, don’t overprice your inventory, and give priority to SSPs that offer the best bids.
Yield Optimization Engine
As a part of TargetVideo’s Yield Optimization Engine, the prebid price floor optimizer relies on data analytics and advanced algorithms to automatically calculate the best price floors for each of your auctions. Moreover, with our header bidding analytics and dynamic real-time adjustments you’ll be able to get the most out of your ad inventory.
Maximize CPM with TargetVideo
TargetVideo’s Managed Ads service offers a dedicated expert ad ops team to manage your ad stack, avoid CPM drops, and achieve the highest ad yield possible. Start monetizing your website with the help of a quality end-to-end video management and monetization solution.
