Many ad professionals look at things like RPM and CPM as metrics to help them optimize their ad earnings. Through years of research, Ezoic has learned that neither RPM nor CPM metrics are particularly valuable when you are talking about measuring website monetization as a whole. Higher CPMs and higher RPMs do not necessarily equal more revenue!
Your website receives a fixed number of visitors. As such, your goal should be to maximize the amount of revenue that you earn per visitor (or session). CPM does not measure that in any way. What is CPM? It is the revenue generated from every 1,000 ad impressions that were rendered in the browser. This is not the same thing as revenue earned from visitors. Ezoic uses EPMV as a measurement to track revenue improvements overall.
What Is EPMV?
EPMV stands for 'Earnings Per Thousand Visitors'. This is how much money you earn, for every 1,000 visits to your website and it's calculated as follows:
EPMV = Total Earnings divided by (Visitors / 1,000)
- In March, your earnings were $1000 (AdSense) + $5000 (AdX) + $500 (Native Ads) = $6,500
- March sessions - from Google Analytics - were 1,000,000 visits
- EPMV is therefore $6,500/(1,000,000/1,000) = $6.50 EPMV
Depending on what you use as your base unit (pageviews or ad impressions), it is a measure of the revenue earned per page viewed or per ad viewed. Neither metric is particularly valuable when you are talking about a website as a whole. Furthermore, EPMV accounts for a wide range of contributory measurements: CPC/CPM/RPM/PV/V etc. which is why we find it to be the most accurate measurement of how well the website is doing overall.
Earnings per Thousand Visits
The revenue earned by a website is affected by many things - such as; number of visits, the number of ads shown during each user session, the bounce rate of each landing page, the pages viewed per visit, upstream traffic source, time of day, type of ad (display/native/inline), RTB bidding parameters of ad, Viewport size, connection speed of the user... etc. There are a myriad of other factors!
Yet, all too often publishers focus on RPM - Page Revenue per 1,000 Page Views [aka eCPM - the effective Cost Per Mille, Per Page]
Page RPM gives a good understanding of how much you're making from 1,000 page views, but takes no account of how many ads there were per page, so it's a blunt tool for understanding monetization success.
"Think about it this way - you can increase your RPM simply by jamming in more ads per page, or by placing higher paying, flashier, more intrusive ads - job done right? Let’s say you do this and RPM goes up from $8 to $10. But what is the impact on your users? Do those extra ads cause dissatisfaction and increase bounce rates? Might you be losing potential revenue on pages that might have otherwise been viewed?"
Let's look at another example (below) and see how a lower RPM can make youmore money (not less):
An increase in RPM from $8 to $10 (great!) BUT, because the bounce rate increased and the page views per visit metric dropped from 2.5 to 1.5, from 10,000 sessions, the number of page views dropped from 25,000 to 15,000. Doing the math: 15,000 page views at $10.00 RPM is $150.
But with the lower RPM of $8 (and fewer intrusive ads), there were more page views 25,000 page views from 10,000 visits @ $8 RPM is $200 in overall revenue!
Which scenario would you choose?
We really need a metric that takes into account all the factors that affect revenue - in effect, we need a ‘True North’ metric for revenue, something that tells you the revenue you actually earn from your visitors; your bottom line as a business. That metric is Earnings per 1000 Visitors (EPMV).
EPMV will automatically take into account the impact your ads have on bounce rate and page views per visit. If the bounce rates go up (bad!), or the pv/v go down (worse!), then this is reflected in the EPMV.
Daily Traffic isn't telling you the whole story either...
Whether or not you use Ezoic, you need to keep track of your EPMV to help take into account seasonal changes in traffic going to the site. You need to know how well the site is being monetized irrespective of whether you had a big traffic day...
Example number 3 - Let's say you have a site that made
- $500 on Sunday from 100,000 visits - was that good or bad?
- Looking at the Previous Sunday you made $380 from 60,000 visits
It's got to be better to have made $500 vs $380, right?
Wrong! While it's better to have a higher income (for sure!), just looking at daily earnings as monetization metric doesn't tell us that the previous Sunday was better monetized.
Which Sunday was better? EPMV tells us:
- Last Sunday was $500/(100,000/1000) = $5 EPMV
- Previous Sunday was $380/(60,000/1000) = $6.33 EPMV
- So, even though I made more money last Sunday ($500) - the EPMV shows me the previous Sunday was better monetized (because I made more money from fewer visits).
EPMV or 'Session earnings' is the only reliable way to measure revenue while taking into effect outside factors such as seasonality and UX changes.
It’s much more important to monitor the value you create from each visitor to a site, rather than trying to manage individual ad pricing - CPM or eCPM - or, manage 'page yield' / RPM, or use daily revenue as your guide.
RPM, CPM and daily revenue monitoring can give you a signal, but are also prone to giving off false positives (e.g. higher RPM, but lower overall earnings) and are not a reliable or scientific way of monitoring your monetization success.
For more information about this topic, check out these relevant blog posts:
Thank you for reading this article! For help or advice about Session Earnings monetization, email firstname.lastname@example.org and speak to one of our site specialists.