What goes into RPM?

Let’s start by defining RPM:

RPM stands for “revenue per mille”, and refers to how much money you make for every 1,000 pageviews.

Total ad earnings divided by pageviews for the same time period multiplied by 1,000 = RPM.

RPM is one of the most common metrics you can use for a quick pulse on how your ad layout is performing. It’s pretty standard across the advertising industry that RPM refers to pageview RPM, but we’ve seen other ad providers use sessions to calculate RPM instead, so it’s important to be aware of how others may be calculating this if you’re discussing your RPM. We want to provide you with transparent and accurate information, so we share RPM based on both pageviews and sessions in your AdThrive dashboard. You’ll see ad earnings per 1,000 sessions reported as “RPS”. Read more about RPM and RPS here.

Next, let’s look at how the ads on your site make money:

For every pageview and every ad slot on your site, hundreds of thousands of advertisers participate in a nearly-instantaneous auction. Our advanced technology optimizes that auction which brings more and better advertisers to the table by helping them “see” what they’re buying, meaning advertisers bid the highest amount possible for the opportunity to advertise on your site.

How advertisers decide to bid in this auction is based on a wide range of factors, but mainly boils down to three key ingredients:

  1. The value of each individual site visitor
  2. The value of your ad layout
  3. The context of the page on your site

The Value of Each Individual Site Visitor

Some visitors are more valuable than others. How do advertisers decide this?

AdThrive’s technology gathers available information about each visitor to help advertisers decide their bids. Some of the information advertisers may use include a visitor’s age and demographics, the device they’re using, where they’re located, whether they tend to buy online frequently, etc.

A few things tend to be particularly valuable to advertisers:

  • Location: Traffic from the US is more valuable than international traffic. That’s because the majority of advertisers want to reach a US-based audience for their US-based products.
  • Device: Desktop traffic is more valuable than mobile traffic. Advertisers’ data shows that while mobile device usage is growing, consumers are still most likely to make a purchase on desktop, so they’re willing to bid more for ads closer to the point of sale. The larger screens on desktop devices allow for a wider variety of ad sizes, which means increased value to advertisers and competition. Desktop ad layouts also contain more highly-viewable ad slots, like the sticky sidebar ad. Read more about the difference between desktop and mobile ad earnings here.
  • Traffic source: Where the visit is coming from can be a major factor in advertisers bids. For example, visitors using a Chrome browser tend to be more valuable than visitors using any other browser. Search engine traffic is also generally more valuable than social media traffic, like visits from Facebook and Pinterest, for a few reasons:
    • The majority of social media visits happen through apps on mobile devices, including using mobile browsers that block cookies (like Safari).
    • The search history that lands a visitor on the site can give advertisers a clear indication of that visitor’s interests, helping them reach their more valuable audience.

In some cases, detailed information isn’t available due to regulation (like GDPR) or browser technology that blocks tracking (like an incognito window or Safari’s Intelligent Tracking Prevention) — this makes those pageviews less valuable to an advertiser.

Advertisers evaluate each site visitor based on their own criteria that helps them determine how valuable that visitor is to their strategy, then they submit an instant bid for the chance to show their ad. Whichever ad will pay the most wins the auction and displays.

Let’s say a reader on your site is located in the United States, has a high household income, and has recently searched online for dining tables using the Chrome browser. A US-based furniture store may want to place a high bid to advertise to this person, making this a super valuable visitor to your site.

Now, imagine this same reader is visiting your site, but on a mobile device using a browser that blocks advertisers from knowing that they are interested in dining room tables. Because the furniture store has less information about this reader, they will bid less to show their ads on the page.

The Value of Your Ad Layout

Some ad layouts are more attractive to advertisers. What makes an ad layout valuable?

Advertisers want to make sure their message is reaching the right audience in the right way, so things like ad viewability can be huge in determining how much they’re willing to bid.

Advertisers have ways to measure when an ad is seen on the reader’s screen. An ad that’s in a high-visibility location of your site (like within the paragraphs of a post), will have higher viewability than an ad loading in the footer that’s rarely on screen. Some advertisers look for high viewability for individual ad units, and some look for an average high viewability for your ad layout as a whole.

This is why we always encourage high-viewability locations for your ads and strategically eliminate lower-viewability ads. Sticky footer ads, sticky sidebar ads, recipe ads, and content ads all have high viewability and make your site more valuable to advertisers.

Want to know more? Read more about the ad types AdThrive runs here. For more info about viewability, check out this article here.

Premium advertisers dislike ad clutter. They don’t want their message to be lost on a page with dozens of other ads and value light and precise ad placements over a heavy ad layout that dilutes the impact of their ad. We work to run the absolute fewest number of ads, while driving up advertiser competition to make every ad slot you run on your site 100% worth it.

High-impact ad “upgrades” like expandable sticky footer ads, Outstream, and mobile interscrollers are all designed to maximize viewability for your ad slots. As a result, they typically capture higher bids than typical display ads. Make sure you’re running all available upgrades for your ad layout to make it as valuable as possible!

The Context of The Page on Your Site

Does content matter to advertisers?

Contextual advertising based on site content has had quite a journey over the last few years!

In the early days of digital advertising, ad content was likely to be based on the context of the page rather than information about the visitor to that page. If a site was all about shoes, advertisers guessed visitors to the site were likely to be interested in shoes.

As more in-depth tracking developed, giving advertisers information on each unique visitor, advertisers began to rely less on the page content and more on individual reader data to inform their bids. Now, an advertiser could reach someone interested in shoes even if they were reading a post about something else.

Recently, regulations like GDPR and new browser privacy settings have taken some aspects of tracking data out of play, so advertising based on page content has seen a resurgence. Advertisers still love to target ads based on what they know about each site visitor, but they’re also using more context clues to help them reach their ideal audience.

CafeMedia has been ahead of the game here for a while now, using our proprietary artificial intelligence platform Marmalade to help classify content on your site so advertisers can target their campaigns! For example, a company that sells frozen fruit might find their perfect audience that’s likely to be interested in their product on a post with a smoothie recipe.

If a premium advertiser has a special campaign that needs a specific audience, we can help them find it and you don’t need to do anything — just keep creating your amazing content, and we’ll help advertisers find it.

No matter which way the ad industry’s pendulum swings on individual reader data or context clues, our superior technology is working to bring you the highest bids for each and every pageview!

BONUS: Our team breaks down RPM in this video:

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