CPM Drop | Top 10 Reasons Your Ad Revenue Is Lower

CPM drop is a publisher's nightmare. This is primarily because it's hard to determine the cause of decreasing ad revenue.

While no publisher sees their revenue constantly increase throughout the year, you should know the reason for those lows (and highs). Whether they're caused by internal changes (website updates, new ad formats, etc.) or external factors (Google search algorithm changes or seasonality).

Here are the top 10 reasons why you are seeing low ad revenue:

1. Seasonal Impacts
2. Macroeconomic Factors
3. Banner Blindness
4. Changes In Ad Placement
5. Adding New Technology Or Partners
6. Low Ad Viewability Score
7. Bad SEO
8. Bot Traffic
9. Ad Blockers
10. Not Brand-Safe Content

Let's break them down and discuss what you can do to prevent or fix the CPM drop and loss of ad revenue.

1. Seasonal Impacts

Depending on your audience and their geography, you should notice your ad revenue going up and down over time. This is called the impact of seasonality on ad revenue.

For example, the traffic around certain sports events would increase for a sports website. Similarly, advertisers, at the same time, would also increase their ad spending. All of which leads to higher earnings.

However, you will notice a decrease when no sports events are happening.

January Slump is a common seasonality trend that affects the majority of publishers. After heavy budget spending - during the festive season leading to Christmas and New Year - most advertisers pause their campaigns and reduce their overall ad budget. Which results in a CPM drop for publishers.

How can I fix it?

While Seasonal CPM drops are pretty common, you can still minimize the loss. Here are some things you should try:

• Update floor prices: Did you increase the floor price (minimum bid accepted price) for your inventory during the peak days? Then it is time to reduce them. Doing this will allow advertisers running low-budget campaigns to appear on your page. Otherwise, you will end up delivering unfilled ad placements.
• Try Ad Refresh: Multiplying the number of impressions per visit should help you increase revenue. And Ad Refresh does precisely that.

• Diversify your content: Try creating evergreen content - for example, how-to guides, frequently asked questions, etc. Advertisers will continue to buy such inventory even when they stop campaigns for seasonal content.

2. Macroeconomic Factors

As you've probably noticed, the global economy is facing significant headwinds due to the war in Ukraine and high inflation. According to the IMF, global growth is the weakest since 2001, except for the global financial crisis and the acute phase of the COVID-19 pandemic.

Like most industries, ad tech has been affected. Alphabet and Meta recently made headlines after reporting lower-than-expected ad revenue for Q3. Both share prices are down more than 35% in 2022. Advertisers are scaling back campaigns due to tighter budgets. This is leading to an industry-wide drop in revenue and CPMs.

How can I fix it?

While this situation is truly out of your control, you can take a few steps to brace for the impact.

• Talk to your ad platform/partner: Since your ad partner works with multiple publishers, they would know better when to expect CPM drops. And which niches are facing the most significant drops. Having this information should prepare you for what to expect in the future.
• Find a strong performing ad tech partner: Your current ad stack or ad tech partner might not be performing strong enough to help you make the most of your inventory regardless of the current macroeconomic landscape. This can be an excellent opportunity to test a new provider by switching completely or running A/B tests. Get in touch with our ad ops experts to assess your site and learn more about how Snigel's AdEngine can help you get the highest CPMs.
• Diversify your income: For some publishers, ad revenue could be the main source of earnings. If this is the case with you, then start working on launching other methods to monetize your traffic. You can start with direct deals with advertisers, sell subscriptions for high-value content, or find another strategy that fits your business needs.
• Cut down your expenses: Just like the advertisers, you should also start cutting down your expenses. The best place to start is to look at all the tools and third-party services you use. And get rid of things you haven't used in the last few months.

3. Banner Blindness

Banner Blindness is when users start ignoring the ads on your page. This happens when they get familiar with the web design and subconsciously know where an ad might appear. Then either skip the part containing ads or not look at them to focus on the content.

How can I fix it?

• Keep testing new ad formats and placement: Seeing ads in the same place causes fatigue leading to users ignoring the placements altogether. However, if you keep changing the placements, sizes, and format, users will have a fresh design before the situation leads to banner blindness.
• Change design of page and website: Just like ad placement, the design of your page also leads to banner blindness. Changing your page design helps you find more exciting places to show ads.
• Try native ads: Native ads look and feel like the page content. Hence visitors are less likely to ignore them. Making ads look less like ads helps combat banner blindness when the content is engaging.

4. Changes in Ad Placement

Testing is important to discover ad formats and placements that work for you. However, not all tests result in success.

If you implement a site-wide change, ad revenue sometimes decreases even when the particular format wins during A/B testing.

How can I fix it?

• Revert the changes: To avoid further loss in revenue, go back to the previous placements. If the CPMs go back to normal, you must avoid that change. If CPM still goes down, it is because of some other reason.
• Optimize for desktop and mobile devices: Visitors use mobile and desktop devices differently, and their attention spans differ for both platforms. Make sure you understand this while planning placements for mobile and desktop devices.
• Use high-paying ad formats: Advertisers sometimes pay more for specific ad formats, such as interactive ad units or specific outstream placements. Make sure you have those formats available to capture these advertisers. Our team can run you through some of Snigel's premium units that will work for your website when you get in touch.

5. Adding New Technology Or Partners

Just like ad placement, changes in tech or adding a new partner can also result in a CPM drop.

It can be software like an analytics tool or a new ad server - everything that can impact your traffic and revenue.

How can I fix the CPM drop?

• Revert the changes: To avoid further revenue loss, go back to the old ways.
• Talk to your partner about the problem: Tell them your ad revenue might be decreasing because of their tool/service. If they cannot help, drop them and look for another one.
• Find a trusted ad tech platform: If your current ad tech partner cannot help you figure out the reason for your CPM drop, then find a reliable partner. For instance, we at Snigel offer up to a 65% increase in ad revenue and help our publishers achieve their ad revenue goals.

6. Low Ad Viewability Score

Advertisers reduce their CPM prices for inventory with low ad viewability scores. Advertiser-side platforms like DSPs are equipped with technology to measure viewability score and share it with advertisers to help them use their ad budget wisely.

How can I fix it?

• Follow best practices: 50% of ads should be visible for 1 second for display and 2 seconds for video ads. Learn about ad viewability best practices and implement them.

Source: Google

• Increase ad loading speed: Slow-loading ads also have poor viewability scores. Make sure you have asynchronous ads independent of your page's loading speed. And enable lazy loading for ads below the fold to increase your First Contentful Paint score.
• Optimize for mobile devices: The viewport of a mobile device is small. And the way visitors use mobile devices is very different from desktop devices. Hence having a different ad placement strategy for mobile devices is very important. You can't use desktop placements on mobile pages.

7. Bad SEO

Google is known to make changes to its search engine algorithms. Due to this, the search results often shuffle, and you might lose an excellent ranking spot for your page in search.

Organic search results are a great way to get organic traffic - often called high-intent traffic vs. paid and referral traffic. Search Engine Optimization (SEO) is vital for your traffic. Since traffic is directly related to your ad revenue, lousy SEO can lead to low ad earnings.

How can I fix it?

• Check if Google made any SERP changes: Every time Google launches a new SERP update, search results go up and down. You need to work on SEO if things don't return to normal in 3-5 days.
• Revamp your existing content: Search engines like to push fresh and new content vs. old and outdated ones. Revamp all those posts that are losing their search positions.
• Improve user experience: Average time on page, bounce rate, clicks, etc., are indicators of good user experience - which is further considered by Google when it comes to ranking pages. Make sure you understand your audience and optimize content & design for them. A great starting point is ensuring you have good Core Web Vital scores.

8. Ad Blockers

26% of the users in the US use ad blockers. It results in ad revenue loss. Especially when publishers start ranking in geographies with high ad blocker usage, this loss goes up.

Ad blockers, to some extent, ensure users' privacy and optimize user experience with fast page loading and better bandwidth. But they also significantly impact publishers' revenue, stopping them from creating good quality free content.

How can I fix it?

• Get whitelisted: Acceptable Ads by Adblock Plus helps publishers whitelist their websites - allowing publishers to show a few non-intrusive ads. This means you can't deliver video or animated ads. However, display ads with some specific sizes are allowed.
• Get an anti-Adblock tool: Snigel's AdBlock revenue recovery solution allows publishers to bypass ad blockers while still providing access to high-paying ad formats. Snigel's script can detect if a user has an AdBlock tool enabled. We deliver non-intrusive yet high-paying ad formats if an ad blocker is detected. Get in touch to find out more about Adblock revenue recovery.
• Ask users to disable ad blockers: Most publishers request their users to turn off ad blockers as it affects their business of publishing free content. This messaging works when you are genuinely offering excellent quality content.

Here is a detailed article that you can check to learn how to recover revenue lost to ad blockers.

10. Your page content is not brand-safe

Brands don't want to appear next to anything that can harm their reputation. For example, content promoting illegal drugs, containing hate speech, or exhorting violence towards a particular social group would be deemed non-brand-safe.

Brand-safe content varies from advertiser to advertiser. Recently, a lot of advertisers have been avoiding pages with COVID-19-related content. This is because there was a lot of misinformation floating around the topic, and since they can verify all of them, it was best to disassociate your brand from such content.

How can I fix it?

• Avoid blacklisted keywords: Advertisers often have a list of risky keywords. These majorly contain adult or illegal content. Try to avoid creating content using these words.
• Focus on direct advertisers: Start by creating brand-safe content for your direct advertisers. This will ensure that you have a good flow of ad income.
• Be transparent about it: If you are a news and media publisher, you must write about non-brand-safe content. However, you can take responsibility for the content and accept that some advertisers might not want to show ads on these pages.

How To Monitor CPM Drop And The Changes In Ad Revenue?

While your ad earnings can depend on a lot of factors, we recommend you keep looking at these three to monitor CPM and avoid any drastic decrease in ad revenue:

1. Focus on traffic: It doesn't matter which SEO tool you use. Make sure you are constantly monitoring your high-value keywords and high-traffic pages. If you see changes in their search engine ranking and traffic reduction, take appropriate steps to improve traffic.
2. Monitor CPMs from advertisers: Know the value of your inventory. Keep experimenting by setting a high price floor to see how high you can sell your inventory. Similarly, reduce the floor price if your pages deliver blank ads/placements.
3. Look at eCPM vs CPM or page RPM: Page RPM tells you how much you earn from each page. Some pages can get a higher income than others for the same number of impressions. Use these high-income pages to deduce the type of content that works best for you.

How To Increase Ad Revenue?

If your ad earnings are stagnant and you last saw an upward graph some time ago, you need to rethink your strategy.

Here are some proven methods to increase your ad revenue:

Enable Header Bidding For Your Programmatic Ad Inventory

Header Bidding is the most effective way to improve your programmatic advertising inventory. It is a widespread technique that helps you reach multiple buyers and pick the highest bid in a fraction of a second.

Enable Ad Refresh

By refreshing your ads based on triggers like 30/60 seconds, hover from a user, etc., you can increase impressions and then your eCPM. Here is everything you need to know about Ad Refresh and how to get started.

Recover Loss Due To Ad Blockers

Publishers often only know how much money they're losing to ad blockers once they look at the numbers. Hence, working with an excellent anti-Adblock tool helps you recover some lost revenue. Most anti-Adblock tools use ad reinsertion and whitelisting techniques, which are perfectly accepted by the industry. Our team can help you determine how much revenue you might miss out on and how to recover it with Snigel's anti-adblocking solution.

Diversify Traffic Monetization Methods

Finally, we recommend diversifying income to reduce your dependency on programmatic ads. You can try:

• Direct deals
• Selling subscription
• Affiliate marketing
• Courses
• And a lot more, depending on your business type and audience.

TL;DR - A Quick Summary

As a publisher, you need to remember that ad revenue depends on multiple aspects - from the quality of content and SEO to the types of ad platforms you are working with.

Given that there is no one size fits all strategy for publishers, we recommend you reach out to Snigel's ad operations experts, that can help you troubleshoot and quickly resolve your problem.

However, if you wish to inspect the problem on your own, start with the following:

• Traffic - Search engine ranking, direct, paid, and referral traffic.
• Ad type, format, placements - Pin-point best and worst performing types.
• Technology and tools - Get rid of tools and technology that are not helping you deliver better and earn more.
• Time of the year - Learn more about seasonal changes in ad revenue from the past year's performance.
• Other issues - monitor the use of ad blockers, bot traffic, and viewability score - then take action accordingly.