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What affects your CPM rates?

Cross-site ad monetization data is hard to obtain, because unless you work for an ad network, it is almost impossible to gain the access to detailed statistics. For anyone from the outside looking at the online advertising, I would venture to say that CPMs would seem like a big black hole.

5 important factors of your CPMs

What is affecting your CPM rates? One of the important things is to keep an eye on the website and estimate the CPMs. Below are the 5 factors/questions you should initially ask yourself:

  1. Is the website “sticky” or simply a one-hit wonder (E.g. a reference site)?
  2. Who is using this website? Just people in the US or a more global scale?
  3. Is the website generic, or does it have its own niche or category (E.g. pets or Fords)?
  4. What is the dependency on Google SEO to bring visitors vs. the dependency of a community site to bring people back?
  5. How many page views does the website have? Just a few? Or a lot?

Simple or difficult to monetize

The simplest way you can monetize:  

One-hit wonder websites in a specific niche are USA based and have lots of search traffic. It’s likely that your website has high CTRs because visitors are in a transactional mode. If you are one of these and have lots of page views, then it means you are going to make lots of cash!

What is difficult to monetize?

Websites that are highly sticky are generally 100% based outside of the US and Europe with huge amount of page views. In this type of setup, people are actually unlikely to have a desire to buy anything, and even if they do, there’s no real possibility for you to be able to make money off of this group.

Category examples

As a rule of thumb, here are some statistics just to show you the approximate rates:

  • Largely international sites have <$0.50 CPM
  • Social sites that do not have a direct ad sales teams have <$0.25 CPM
  • Websites that are medium using banner ad networks have <$1 CPM
  • Niche reference sites have >$5 CPM or sometimes much higher, depending on what the niche is

Since we focus on what is called “remnant” advertising, the numbers will likely be near the bottom of the range for these sites. That is, social networks may be quoting a CPM of $20, but what is truly meant is that 1 % of their inventory will sell at that rate, and the balance, or 99%, is sold at <$0.25 prices.

Your website will fall into one of two categories:

1. Horizontal websites used daily with low CPMs but a huge number of page views;

or

2. Vertical websites capturing user intent, which are generally used intermittently. These create lots of traffic from the search creating high CPMs but with a low number of page views.

When horizontal sites are scaled up to a large enough website, they will be able to employ direct ad sales teams, which will raise the CPM significantly, however, this process is demand inhibited.

Luckily, Google is both horizontal and vertical – Every day it is used by people, but at the same time it captures the intent of the user.

Social networks will monetise poorly

Of course, the websites that have a high number of page views are generally sticky and contain lots of context-but also have less social content.

Small sites vs. large sites

Some experts support the idea that smaller websites will actually monetize better than larger ones. I believe this is a correlation not causation. There are hundreds of smaller websites out there that get the majority of their traffic from Google. It is more difficult to create a functional social site where visitors return daily, than to build a website where people sometimes stumble upon your site through Google or another search engine.

Thus, we have covered all the main factors which influence on your CPM rate. Read more about 4 proven ways to monetize your website in our Blog.

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