Why Publishers Shouldn’t Care About eCPM

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Posted: February 9, 2016

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If you type “eCPM” on Google, the search engine will come back to you with a number of articles that explain to you what it is, why it’s important and there are recommendations about the ways to improve this measurement. But should you be that obsessed with it…? In the programmatic era of app monetization there are not that many manual tools for publishers themselves to affect eCPM considerably as almost all the implications had been made a long time ago, during the app concept development.
Let’s have a look at eCPM and its parts to evaluate the room for improvements.
eCPM (effective Cost Per Mile) is often used as the ad industry’s universal metric for performance analysis of ad networks, ad formats and ad inventory.
Picture for eCPM article
It’s calculated according to the next formula: eCPM = CTR* CPI* CVR*1000, where
CTR = Click Through Rate
CPI = Cost Per Install
CVR = Conversion Rate
Theoretically it means that, increasing any of these factors, even a single one, you will improve your eCPM as well. But are you as powerful as you think?
Generally the easiest factor to improve eCPM is your Click-Through Rate (CTR) that mainly depends on the ad format available in your application. Usually the most profitable formats are native ads and app walls, followed by interstitials, and banners. For example, the CTR of native ads or app walls is about 5-20% while the banners’ CTR reaches only 0.5-2%.
What you cannot change: You cannot affect the quality or the content of the ads provided by the advertiser. If the quality is low, the users will not click on the ads so that CTR will remain low as well. The type of mobile application you are promoting also affects your eCPM: people are more likely to install utility apps than games.  Sometimes CTR also depends on the advertiser’s brand awareness and reputation. For instance, one popular Chinese developer, who had successfully published utility app (memory cleaner), represented another app for editing photos, didn’t reach the expected CTR just because of its associations with the cleaner and antivirus app provider.
What you can do: Apply different ad formats (app walls, ad feeds, interstitials, customized icons, banners etc.) that will catch the eyes and serve as a call to action, increasing conversion and, therefore, CVR. Allow all ad formats including interactive video. Experiment with various placements of the banners – move them to the top or to the bottom of the screen, adjust size and work on design. Bigger ads usually see a higher CTR than smaller banner ads.
The main determinant of your CPI (and, subsequently, of your eCPM) is the geography of your users. If they’re from the US or Western Europe, you’ll get a much higher eCPM than you would in, say, South East Asia, Russia or India. According to Mobvista’s data, the eCPM in US is around $26, in India – $12,5; in Russia – $11,5; in Indonesia – $6,5.
The second largest factor is the volume of unique users you have in a specific geo: a few million monthly unique users may get you attention from brands and agencies, while a few hundred thousand won’t.  In that case, you have to go through an ad network.
What you hardly can change: your app geo distribution. Usually publishers are running apps which have been already localized for the certain region. The retargeting from, let’s say, Asia to the US with take time and bring additional expenses.
Nowadays CVR relies mostly on the machinery staff – technology that the certain ad network uses, trying to find the proper mechanism with the perfect algorithm.
What you cannot help: Hardly can you change the algorithms used by the ad networks. If your ad partner is limited with the media channels or contacts with another ad partners, it affects your monetization too.
What you can do: When choosing the ad network, pay attention to the algorithm, data and number of media channels it owns. For example, when it comes to Mobvista, its M System (monetization SDK) contains data about the billions of impressions from thousands of media sources. When the user completes certain operation (clicks on the ad unit) the request is sent to our server. Taking into account the previous experience with publishers who have been monetizing similar apps, the machinery algorithm analyses the offers, builds an effective predicting model to forecast campaign performance and allocates the one with the highest eCPM.  All the data are exchanged, collected and analyzed in real time so that we can make sure that we recommend the right offers for right person. With M System recommendation algorithm, your traffic will be served with the best campaigns for every ad request.
Connect to multiple networks. Single ad network generates unstable eCPM and fill rates. Using more ad networks allows you to stabilize your ad revenue and increase fill rates up to 99%. With M System you can merge all ad networks to your system, prioritizing many different ad networks within one page, access offers from all premium networks like Facebook, AdMob, Pubnative, Supersonic etc. You can easily build up a large inventory of excellent campaigns to ensure high fill rate and strong earnings. You can also set up house ad campaigns to promote either your own apps or another advertiser’s product through a direct deal.
Prioritise control function to monetize your traffic with the most profitable networks. For each ad unit and each country, you can set priority among different networks and house ads. Therefore, you can fully control your traffic flow based on your actual needs, and switch your traffic to the networks or ads with the highest returns any time you want. In US the average price for application offer is $0.8 and for game offers – $1.3.
And don’t forget to consult with your account managers as they can provide you with information and give valuable recommendations on boosting your eCPM.
You can visit the Mobvista website here.