OKO Digital

The ad optimisation people

  • Home
  • Publisher Solutions
    • Website Monetization
    • Header Bidding
    • AdX – Google Ad Exchange
    • App Ad Monetization
    • WordPress Monetization
  • About us
    • OKO & the OKO team
    • Careers
  • Blog
    • Latest blog posts
    • Ad Blocking
    • Ad Exchange (AdX)
    • Ad Optimisation
    • Ad Performance & Page Speed
    • Ad Publishing Landscape
    • AdSense
    • DoubleClick For Publishers (DFP)
    • Exchange Bidding
    • Google Ad Manager
    • Google Certified Publishing Partners
    • Header Bidding
    • Privacy & GDPR
    • Program Policy
    • Open Bidding
    • Traffic
  • Contact

Ad Optimisation, Google AdSense, Traffic . 27th May 2015

How high traffic can lower your AdSense RPM

It doesn’t seem unreasonable to expect that doubling your page views should double your earnings, yet this is rarely the experience of content producers who see sudden surges of traffic.  All too often RPMs drop almost mirroring the traffic increases and resulting in far lower incremental revenue gains than they might hope.

If the new traffic is of lower quality this is easy to understand, but we see this pattern over and over when the traffic profile is larger, but otherwise unchanged.

In the chart below ad impressions are shown in yellow and RPM is in pink. As impressions increase the RPM has responded by dropping.  If this looks familiar, read on to understand why this happens and why it isn’t always a bad thing.

Tell tale mirroring

 

When looking at performance changes, it is always useful to look behind what is driving those RPM figures. RPM is a product of Cost Per Click (CPC) multiplied by Click Through Rate (CTR).  If your Impression RPM drops then it is because either: A) Your CTR has dropped, B) Your CPC has dropped or C) Both of these things have happened.

Why high traffic can lower your CPC

AdSense reporting encourages us to watch average performance numbers. Averages can be deceptive though and few advertisers will actually pay your average cost per click. The Revenue Profile report within AdSense provides a good demonstration of this.

Revenue profile report

The revenue profile report gives publishers insight into what high value bids they are attracting. In the above example, the publisher is achieving an average ad-request RPM of $0.39, but their top 10% of impressions are averaging $2.66.

One of the great strengths of AdSense is that it fills close to 100% of impressions. If the available inventory on a site increases that means that lower bids need to be accepted in order to fill those additional requests. There may be exactly the same number of impressions being sold at the higher price, but the additional inventory may go for a lower price in order to ensure that the impression is served.

An increase in the supply of available impressions also means less upwards pressure in the auction to push advertisers up to their maximum bid, again lowering the average price achieved for an impression. In short, they might still get the high paying impressions, but they are joined by lower paying ones that drag the average down.

Why high traffic can lower your CTR

With the best performing ads likely to win auctions, an increase in available impressions also opens the door for less competitive advertisers.  Less competitive advertisers might be lower quality, less compelling or might just be less precisely targeted to your audience. Any of these can result in ads that are less likely to get clicked and bring your average CTR down as a result.

Putting things in perspective

The “double-whammy” of lower CTR and lower CPC is usually bad news for publishers, and can certainly put a depressing slant on your RPM charts. When the double-whammy comes as a result of increased traffic the end result doesn’t have to be bad.

If we go back to our first chart and now also add a line in for revenue in blue, we get a more realistic picture of what is happening.  The average performance metrics might be lower, but overall the site is earning more as a result of the increased traffic.

perspective

Metrics like RPM are useful tools to understand and use to get insights, but it is revenue that pays the bills.  In the example above the site ended up more than doubling its earnings, a fact that soon helped alleviate any worries about falling RPMs.

Ad Optimisation, Google AdSense, Traffic . Analysis

About Abbey Colville

SEARCH

TOPICS

  • Ad Blocking
  • Ad Exchange (AdX)
  • Ad Optimisation
  • Ad Performance & Page Speed
  • Ad Publishing Landscape
  • AdSense
  • DoubleClick For Publishers (DFP)
  • Exchange Bidding
  • Google Ad Manager
  • Google Certified Publishing Partners
  • Header Bidding
  • Open Bidding
  • Privacy & GDPR
  • Program Policy
  • Traffic

Could the ads on your site be earning more?

Find out how OKO help publishers earn more from their ads.

LEARN MORE
Insticator

OKO Digital, The Cake Shed, Manor Farm, Manor Road, Hayling Island, Hampshire, PO11 0QW

Google Certified Publisher Partner Logo

OKO is a registered trademark and trading style of OKO Digital Limited. Registered in England company number 03867231. © OKO Digital Limited 1996-2018. All Rights Reserved.

  • Privacy Policy
  • Cookie Policy
Manage Cookie Consent
We use cookies to optimise our website and our service.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}