Low CPM Issues with Adsterra: Here the Reasons

In our previous discussion, we delved into the core elements that contribute to fluctuations in CPM rates. Today, we're taking a closer look at the numbers and shedding light on the intricacies of the cost-per-mille metric with a seasoned expert, Mike A., who heads the Publishers Team at Adsterra. Mike's affinity for solid evidence and compelling arguments ensures that our journey will be rich with calculations and real-world instances. So, prepare yourself a robust cup of coffee and let's embark on a mathematical voyage.

– Why is my CPM so distressingly low?

– My earnings were stellar yesterday, yet they plummeted today! Can you fix this?

– I've witnessed a sharp decline in my CPM. Is there a remedy?

– Can you miraculously escalate my metrics from a meager $0.0001 to a grand $5?

– I sent forth 10 impressions, yielding 2 clicks, but alas, no monetary gains. How could this be?

These queries are entirely rational, given that the CPM rate has invariably functioned as the linchpin of a publisher's income. However, the narrative we are about to unfold contends that the CPM rate is inextricably linked to your website visitors' behaviors and, intriguingly enough, the goals of the advertisers. So, let's immerse ourselves in the intricacies.

You're already familiar with the term CPM (cost-per-mille), or even its cousin, RPM (revenue per mile), often used by publishers. In this discourse, we'll adhere to the more prevalent variant. The CPM is essentially an ever-evolving metric, contingent upon your traffic's performance. It's a fluid entity, adapting to the diverse objectives of advertisers. Essentially, we sum up the earnings stemming from the prescribed payouts set by advertisers. Adsterra's AI algorithms masterfully sift through the available advertisers, ensuring optimal returns for your specific traffic.

Imagine a scenario where an enticing new gadget beckons, and an advertiser anticipates a landslide of sales. The stage is set for an advertising blitz! As you commence the ad rotation, users, enticed by the product, eagerly click, traverse to the advertiser's landing page, and seal the deal. This symbiotic chain of events culminates in satisfaction for users, advertisers, and, of course, the publisher (you), who garners a well-deserved credit for the sale. The advertiser recognizes that your audience is primed for action, thus warranting a higher fee for ad impressions on your platform.

Yet, here's the twist. When these same users revisit your domain, encountering the same ads, the odds of them recommitting to a purchase wane. Today, your traffic lacks the allure it once held for the advertiser. As your conversions dwindle, so does your CPM.

But hold on! You might be juggling an array of ads, with a focus on CPM. Why should conversions be your concern? Allow us to illuminate this aspect.

Adsterra extends beyond the confines of mere earnings, offering you eCPM (effective CPM) rates that encompass all forms of user interaction: views, clicks, and conversions. Elevate your revenues with high-yield ads.

Beneath the veneer of every CPM-based ad lies a distinct CPA (cost-per-action) proposition, unless, of course, the advertiser aims to saturate the market with brand presence. Let's delve deeper. Two primary categories of advertisers emerge:

First in line are the CPA advertisers, who remunerate for specific user actions – installing an app (CPI), submitting contact details (CPL), orchestrating a sale (CPS), and the like. Nearly every ad network features CPA ads, with some being exclusively CPA-oriented. Therefore, your earnings hinge solely on the success of your traffic in delivering the stipulated actions. No actions, no revenue.

The second echelon constitutes the CPM advertisers, who prescribe a fixed fee for the traffic. This class of advertisers assumes a certain degree of risk, hoping that the acquired traffic materializes into conversions and subsequently, revenue.

Consider an advertiser who embarks on a CPA venture with a $5 payout, predicated on an estimated conversion rate of 1 sale per 4000 impressions. Consequently, they set a CPM of $1.25 per 1000 impressions. Now, envision three websites vying for this offer.

Website #1: Achieving 2 sales per 2000 impressions, earning the publisher $2.50 (potential CPA earnings: $10). The advertiser secures $10 - $2.50 = $7.50.

Website #2: Securing 1 sale per 2000 impressions, yielding the publisher $2.50 (potential CPA earnings: $5). The advertiser's gain is $5 - $2.50 = $2.50.

Website #3: Failing to notch a sale within 2000 impressions, still granting the publisher $2.50 (potential CPA earnings: $0). The advertiser incurs a loss of $0 - $2.50 = -$2.50.

The CPM advertiser scrutinizes these statistics, promptly eliminating Website #3 from the equation due to its unprofitability. This concise exposition elucidates the mechanics of CPM ads. Advertisers don't prematurely dismiss sources after a mere 2000 impressions; they usually scale up their traffic acquisition to ascertain conversions on a larger scale.

Having grasped the intricacies, let's continue by examining factors impacting your eCPM.

Frequency capping, typically applied to popunder ads, delineates the maximum number of times a unique user encounters such ads within a specified timeframe. It's imperative to recognize that advertisers are ranked based on their bid values for traffic.

Advertiser #1: Bidding $2

Advertiser #2: Bidding $1.5

Advertiser #3: Bidding $1.0

Advertiser #4: Bidding $0.5

Advertiser #5: Bidding $0.05

Publisher #1: Opting for 1/24 (1 popunder per 24 hours)

Publisher #2: Choosing 3/24 (3 popunders per 24 hours)

Publisher #3: Electing 5/24 (5 popunders per 24 hours)

Assuming each publisher attracts 1000 users, all of whom encounter ads aligned with the stipulated frequency caps, how does this affect CPM and earnings?

Publisher #1 accrues 1000 impressions, translating to earnings of $2, with an eCPM of $2. This publisher's gains primarily stem from Advertiser #

Publisher #2 accumulates 3000 impressions, resulting in earnings of $2 + $1.5 + $1.00 = $4.5, corresponding to a CPM of $1.5.

Publisher #3 amasses 5000 impressions, thereby amassing $2 + $1.5 + $1.00 + $0.5 + $0.05 = $5.05, aligning with a CPM of $1.01 (calculated by summing bids and dividing by the number of advertisers – 5).

A higher frequency cap yields augmented profits but entails a lower eCPM value. It's crucial to strike a balance since excessive popunders can irk users, prompting them to dismiss the ads sans any remunerative actions. Such scenarios can lead to advertisers blacklisting your website and ultimately curbing your CPM.

This principle applies universally, spanning diverse ad formats – popunders, display banners, native banners, and beyond. A prevalent misconception posits that incorporating two popunders from distinct ad networks onto a single page will instantly double profits. Alas, this notion falls short. Over time, the second ad network may inadvertently diminish your CPM. The top-tier advertisers, whose bids command a premium, are relegated to second-click traffic, thereby undermining the overall quality.

In due course, this may engender a decrease in CPM rates (an unfavorable outcome for publishers), or worse, prompt the cessation of traffic procurement from your platform. Consequentially, your traffic shifts to the secondary bid tier, which invariably pales in comparison to the prime advertising bid, thus culminating in a plummeting eCPM and dwindling profits.

A similar narrative unfolds in the realm of banner ads. Instances abound of websites sporting an excessive array of banners on a single page, with perplexed inquiries surrounding the resultant low banner CPM. A substantial number of display banner advertisers have pivoted toward CPA models due to this overtly exuberant behavior. Publishers, in a bid to optimize CPM banner ads, inundate their websites with a surfeit of banners – 20, 30, or even 100 – inadvertently undermining the display banner market. Thus, meticulous deliberation is required when determining the number of ads to integrate, fostering equilibrium between profitability and user satisfaction.

The CPM isn't a static rate characterized by a fixed ad impression payout. Rather, it morphs dynamically, intricately tied to your traffic's response to advertisers' overtures and the efficacy with which you integrate ads onto your platform. The crux of the matter rests upon these pillars:

1. Embedded within each CPM ad lies a distinct CPA proposition.

2. Your traffic's quality and user behavior wield paramount influence over CPM.

3. An oversaturation of ads impairs your website's profitability.

4. Ill-suited frequency capping for popunders and banners can prove counterproductive.

5. Seek counsel from your dedicated manager – their insights are invaluable, aligning with advertisers' objectives.

Embark upon this enlightening journey armed with newfound understanding, poised to optimize your CPM strategy and elevate your digital venture to unprecedented heights.