CPM is probably the oldest way to make money from your website. What is CPM?
I have experience of cooperating with one of the four networks – ValueClick. The other networks have set quite high entry barriers and it is not that easy to become their members if you do not run old and established websites with high traffic (after 15 months of my online business activity I can’t boast of a website of that kind. Wish I could).
I have not come across any good guides or manuals on CPM networks (probably it is accepted that these networks are in the past or that everyone knows how to deal with them – they are wrong) until recently I have discovered this article:
Before you can expect to increase or maximize earnings through any specific avenue, you need to do your due-diligence and research, followed by vigorous testing. CPM networks can be tricky at times, especially for new webmasters. What I’m going to go through is the basic process of how CPM networks work and some things you should always do, as well as some optional techniques that may fit well for your website. Let’s begin with the underlying process of serving an ad:
Ad Serving Basics
To keep things simple we’ll assume that you’re with any of the big networks such as: Tribal, VCM, Advertising.com, Casale, etc. (vertically-oriented and smaller networks aside).
Each time your website is loaded your ad network has to look at an array of information to decide what ad to serve. Here are some of things, but not limited to, that can be factored in:
-Users geographical location (country/state/city/etc.)
-Time of day
-Previous ad performance
-Behavioral Targeting (user retargeting)
*An advertiser may only want their ad to display once per visitor in a given day. A frequency cap of 1/24 will be set (1 time per 24 hours). This is in the advertiser’s discretion and varies for each campaign.
We’ll use some example advertisers to help illustrate the process:
Advertiser A – $3 CPM
Targeting: Auto channel, California
Advertiser B – $2 CPM
Targeting: US Only
Advertiser C – $1 CPM
Let’s say Joe from Montana goes to your automotive website for the first time. This calls the ad server and brings back Advertiser B’s $2 CPM ad. The reason the higher paying ad wasn’t served is because the California filter was invalid, causing the ad servers to move to the next highest paying advertiser to compare targeting. In this case Advertiser B was given the impression because they only looked at whether or not the user was in the US and hasn’t already been shown the ad in the last 24 hours.
Now let’s say Bob from the UK visits the same site for the first time. Bob is served with Advertiser C’s $1 CPM ad. This is because he didn’t match the criteria of either of the first two advertisers.
Now Bob goes ahead and clicks on a sub-page of your website. At this point Bob is served an Ad Council ad that earns you NO money. (Ad Council ads are served when a network can’t fill an impression.) Because Advertiser C is the only advertiser interested in UK traffic, they are the only option for Bob. Since Advertiser B has a frequency cap of 1/24 they aren’t interested in future impressions from the same user (for up to 24 hours anyway). Sorry Bob, and sorry webmaster because you’ve just effectively earned $0.00 CPM on the second impression.
In the example above, the ad network didn’t have an advertiser to serve for Bob’s second ad call. When this happens we refer to the ad being served as a “Default Ad”.
If a default ad hasn’t been setup the ad network will display an Ad Council ad in its place. This is something you want to minimize since you’re not going to earn a dime off Ad Council ads. The first thing you should ALWAYS do before placing an ad networks tags up is setup your default ads. There are a couple basic options we have here:
Chaining Ad Networks
I have heard too many webmasters ask “What is the best ad network? Who should I go with?” My answer to this is, “All of them!” Who ever said a website is constrained to only one network? Unless you’ve signed an exclusive contract (which is unlikely) you have free reign to do what you want with your traffic.
Let’s assume you’re with Casale and you’re serving 10k impressions per day. Out of that 10k there are 3k not being filled and displaying Ad Council ads. That’s 30% of your traffic not being monetized! We need to fill this 30% immedietly.
Each ad network will have some of the same advertisers, but also different advertisers, which opens up more opportunity for you to fill each impression. What you can do is create an account with another ad network and use their tags as the Casale default ads. When an impression can’t be filled by Casale you have the opportunity to fill it with the 2nd tier network. You can go as deep as you want with this, adding as many networks to the chain as you wish. This is what I call the ad-chain.
Now that you’ve setup the ad-chain you’ll want something at the end to cover anything the networks can’t fill. If you have an affiliate program that you know works well with your site, try it out to fill that remnant inventory.
One of the best ways to cover unfilled inventory on the tail-end of the ad-chain is to use your own banners. Even if these leftover impressions aren’t worth anything to advertisers, there’s still no reason to give them away for free. Leverage this and use these impressions to do some self-promotion or cross promotions between internal sites.
One last thing I’d like to point out is to know your inventory. By this I mean figure out why you’re still able to serve impressions 5 levels deep on the ad-chain. Is it because users stay on your site for hours and look at tons of pages? Is it because these users are from an International country that no advertiser is interested in? Do some homework and figure out what’s going on. If you can determine that 90% of the impressions being served at the tail-end of your ad chain are from Italy, you can use that information to your advantage. Find yourself a nice Italian merchant to promote for that left over traffic, do something with it, but use the information you have as a guideline and by all means be creative!
Performance Is Everything
Ad placement is key… Stop trying to put three banner ads in a row at the bottom of your website! This will almost always make you LESS money. Yes, less money. It seems correct to think that if you have more ads, you make more money but that is not always true.
Ad networks measure performance on each campaign, on each website. They do this because advertisers need some form of metrics to show that their advertising means are effective. If you place an ad at the bottom of your page that is never seen, odds are any ad being shown is going to perform very poorly. Ad networks recognize this and optimize off these poor converting campaigns from your website. Over time more and more campaigns are optimized off your account, and at the end of the day you have much less room to work with. The less advertisers happy with your traffic, the more likely your ads will be defaulting.
Generally it’s safe to say to keep your ad placement above the fold, so they will always be noticed. Don’t post excessive ads thinking they will make you more money. When you do this all you are doing is making the overall ad effectiveness drop. This causes more campaigns to be optimized off and result in lower eCPM’s. I’m not saying it’s not ok to have multiple ad units, in fact I encourage that, I’m just saying don’t be greedy!
The last thing I’d suggest is to take a psychological look at your traffic. Look at what goes on when users visit your website. Where do they go, how do they get there and how long does it take? Use this to figure out ad placement. Does a user go straight to the middle of the page when loading your site? If so, then that’s where you ad needs to be. Does a user quickly skip through two pages to get the third page? If so then that’s where you should stress ad placement the most. This applies to all ads, even outside CPM. Basically I’m just trying to say that you need to take time to understand your traffic in more ways than one. Once you understand, you will come out golden.
For those of you that either have an ad server, or the technology backbone to handle segmenting traffic, this is something you should consider.
Let’s say that an ad network has an advertisers that is advertising in the US and in Canada and is paying a whopping $4 CPM for banner ads. Now let’s say that 80% of your traffic is from the US, 5% from Canada and 5% elsewhere. We’ll imagine that the advertiser is performing absolutely great in Canada, but extremely horrible in the US. What’s going to happen here? The campaign is going to be optimized off because the 5% of great conversions doesn’t compensate for the 80% of very poor conversions.
This is where segmentation is crucial. If your traffic is high enough, you should be able to convince your ad networks to provide you with multiple sets of tags. Each set is essentially looked at as its own website, even though it’s all on the same site. This means that one set of tags can have a campaign running while another has had the same campaign optimized off.
So let’s take the same case as above but assume that you have an ad server and are serving the first set of tags to US, the second set to Canada, and the third set to everything else. The $4 CPM advertiser will be quickly optimized off the US set of tags but because you are segmenting your traffic the advertiser will remain with the Canada tags. Now you’ve successfully retained the advertiser, while keeping them happy at the same time! This also allows you to display different ads for different countries. You may not want a “Fart button” ad for your US traffic, but maybe you don’t mind if it’s shown internationally… just another way to increase earnings.
Segmentation can go many ways, and get much more advanced. Use this as a starting point, or at least as a way to help you understand different ways you should be looking at your traffic.
The dreaded pop-unders. I understand that many webmasters despise pop-unders, but the truth is the payouts are HUGE! For some sites this will never be an option and for those of you that haven’t crossed over, take the time to think about it.
The beauty about pop-unders is that they are off-page. They don’t have to damage the look and feel of your website so you can be more lenient with what ad creatives you allow. Unless you’re with one of the smaller networks, most ad networks will only display one or two pop-unders to the same user in a given day. This is a plus when you’re looking to keep your user-base happy.
If you haven’t done so already, test the waters and see what kind of results you get. Try placing a pop-under a couple pages deep as a test. If you like what you see you can ramp up volume and bank on it.
Wrapping It Up
If there is something I can’t stress enough, it’s to take the time to do your research. Over the years I’ve learned that knowledge is key. Knowledge is what bridges the gap (and a big gap at that) between a novice and a professional, and is directly proportional to scaling your success. With this and everything else, allocate some time and effort into things and in the end it will show.
Anyway, that about wraps up my first post. Let me know what you think and if you have any questions. Also, some of the future posts I’m considering are topics like: Advanced AdWords, Media Buying for Beginners, Promotions, Increasing CTR’s, etc.
If you have any ideas, I am open to them so let me know! Oh and sorry if this is messy or redundant, it was quickly written.
But I am sure that you should not be discouraged by these falling rates – this way to earn a few extra dollars nicely adds to your contextual and CPA programs. You just need the balance of these programs on your website not to scare away your visitors – remember that your competitors are just one click away.
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