When publishers seek advice for increasing CPMs, the suggestions that they receive are mostly generic – Increase ad viewability, improve user experience, implement header bidding, among others. While there’s no doubt that these best practices can increase CPM, we have seen publishers struggling with low CPMs even after they implemented the suggestions. There are hundreds of things that can go wrong when it comes to serving ads.
So if you are trying to figure out what went wrong with the setup, know that there’s still room for improvement. In this post, we will cover some more reasons that could be dragging your CPMs down and discuss the solutions as well.
Sidenote: Consider this as the next round of troubleshooting and you should’ve taken care of the suggestions mentioned here.
Header Bidding Implementation
a. Premature Optimization:
Header Bidding is known to increase CPM for publishers. But if you have recently implemented it on your site, then don’t expect CPMs to shoot up instantly. When your inventory is new to the market, then bidder partners will take time to bid for it because of the absence of historical data. It will take at least a week to start seeing the bids and eCPM lift. If you try to optimize prior, you may end up getting undesired results.
b. Static Sequence of Bidders:
The header bidding wrapper sends bid requests to multiple bidding partners. The collected bids are then sent to the ad server. If the wrapper is sending the bid request in a sequence, and that sequence is the same every time, then the last bidder to get the request will have the least amount of time to submit its bid response to the ad server.
As a result, the playing field will not be the same for all the players and you will not get the benefit of fair competition. To avoid this situation, randomize the bidder sequence in your wrapper.
c. Floor Prices:
Price floors are perhaps the most straightforward way to increase your CPMs. Let’s say you are selling your ad impressions at $1 via AdSense, when you implement header bidding, try to slowly increase the floor price as well. But ensure you are capturing most of the bids (if not all) from header auctions. Having a high price floor can balance out the benefit of header bidding.
Experiment with different floors, analyze results and then optimize. There’s no one-size-fits-all solution in adtech.
d. Demand Partners
While using header bidding, the idea of having a large number of demand partners entices us. We know that more competition leads to higher prices. But if the bidders aren’t actively bidding and winning your impression, then there’s no use.
Some partners may not be winning auctions at all and some may not even bid for most of the impressions. And, that’s why it is advised to assess the partner periodically. You can take a look at metrics like bid rate, win rate, etc. to have an idea.
In the past few years, the concern for online privacy has increased worldwide. Enforcement of laws including GDPR, CCPA, and COPPA are proof for it. And, as they target the data (which is used to value an ad impression), CPMs tend to be affected.
But if you have implemented proper consent mechanism (via a Consent Management Platform) and updated the platforms (Google Ad Manager, for example) as instructed, then you can mitigate the impact.
For instance, GDPR makes it mandatory for you to get legitimate consent from EU users for ad targeting and supply the consent status (yes/no) to the ad tech vendors via a privacy string. If you are not providing the privacy string then advertisers, to avoid the risk, may not bid for your impressions. As a result, the price for your inventory goes down.
Similarly, COPPA says that you cannot serve personalized ads to children. So, if your target audience is children then your CPM is bound to go down. In fact, recently Google Ad Manager blocked price priority line items targeting child-directed ad requests (your header bidding partners wouldn’t be able to serve any ads at all – personalized or non-personalized). Ensure you are keeping up with the platform changes and laws.
If most of your audience is using Safari and Mozilla browser, then it would be difficult for the ad buyers to target the right audience. These browsers are fighting against the use of third-party cookie which was the backbone of personalized ads so far. In the next two years, Google’s Chrome browser will also follow the suite. Since personalized and retargeted ads are the first choice of the advertisers, the inability to target will bring down your CPM.
The whole industry is fighting with this issue currently. As we suggested earlier as well, you need to develop your first-party data strategy to keep your CPM intact. Additionally, using key-value targeting for direct campaigns will improve the results, it will help you in getting high rates for your inventory.
Ad Refreshing and User Activity
a. Ad Refresh
Ad refreshing will increase CPM and revenue when done right. There you go – we said it and we’ve seen impressive results across hundreds of publishers first-hand. But when ads are getting refreshed too often, then the user will not get enough time to see the ads before they are replaced. It means that your viewability will be low and hence, your CPM will also be lower. But CPM should not be the only metric that you should be tracking with Ad Refresh because the number of impressions will also increase with it.
We offer an advanced ad refreshing product ‘Active Exposure Time (AXT)’ that refreshes ads based on the user activity, ad viewability, and many other signs — all while ensuring that no policies are being broken.
b. User Engagement
Signals like high bounce rate, low dwell time, low organic traffic, low page loading speed, invalid traffic, etc. show that the quality of your inventory isn’t good. Many of these signals also lead to lower CTR, lower engagement, and lower attention of the user.
When you are not able to convey that your website and its audience are valuable, then advertisers will not prefer your inventory. So, the CPM will not be higher. Work on your content and optimize it with the help of first-party data.
Your CPMs can be affected because of the other reasons that aren’t discussed here. As a publisher, the best you can do is (1) to keep up with the industry and platform changes and (2) get help from programmatic monetization partners. Still couldn’t figure out why the CPMs are lower than the industry average? Then, let us know in the comments.