How to mitigate eCPM Decay and Keep a High Ad Revenue

After investing countless hours into your new mobile game, it’s finally ready to be released. Everything has been double-checked, triple-checked, it is time to push the red button and see what happens. You get off to a flying start, but soon enough, your eCPM starts decaying – starts dropping dramatically.

The graph given in image one represents how your eCPM (effective cost per mile) is continuously declining. eCPM is the number that displays the amount of money you earn by the adverts you included in your mobile game. However, there are ways to ease this fall, you just don’t need to be standing, flapping your hands. Some of the ways you can improve your eCPM and earn more money with your mobile game will be explained further in the article. First, let us concentrate on the eCPM itself.

So, what exactly is eCPM?

As previously mentioned, eCPM means Effective Cost per Mille. The measure itself represents the actual revenue which is generated for 1000 impressions. Companies have quickly accepted this measure as a standard value of their performance. The mathematical equation for evaluating the eCPM is as follows:

In eCPM calculation the first step is dividing the total advertising earnings with the entire impressions number the advertiser has provided you with. The result of this calculation represents the sum of your earnings for one impression. To get the final figure, you have to multiply the number you get with 1000, because the impressions are paid out for each thousand.

The number you get with this multiplication is your average earning for your campaign.

If the given explanation is too complicated, then consider this simple example: CPM represents the measure for pricing and reach of your campaign, while the eCPM represents the performance measure. It is essential to able to track this metric in your game analytics platform of choice.

eCPM is not the only factor

Still, you cannot rely your earnings based solely on eCPM. For example, a mobile app can earn much more money if it attracts more visitors, even with a low eCPM, than an app with a lower number of visitors. The factor of your product’s popularity should also be taken into consideration alongside eCPM.

For example, imagine app A earns $2 eCPM and app B earns $5 CPM. Examining this statement on its, app B is allegedly more profitable. But in reality app A has a much larger user base that gets exposed to 1,000,000 ad impressions per month, while app B has less users and only 10,000 impressions per month. This draws a completely different picture - app A makes a total of $50 revenue per month, while app B racks in $2000 eventhough it has a lower eCPM.

CPM meaning

The CPM abbreviation is extremely common in technology. The area in which this abbreviation is most common is the world of online and mobile ads, how often do they pop up, how interested people are in them, and how lucrative are the adverts for the companies and ad networks. CPM stands for Cost Per Mille. The Mille comes from the Latin word meaning thousand. Therefore, CPM represents the price of a thousand ad impressions. The impression means every single loading time of an advert, meaning that each time a page containing an ad is fully loaded, the publisher earns their impression.

In other words, for every 1000 impression a certain ad gets, the advertiser must pay a certain amount of money. This is the main difference between CPM and eCPM, where the CPM is the measure for pricing and while the eCPM is the performance measure.

eCPM decay and its meaning

Once you start earning money from your app, and you complete your deal with an advertiser and the ad is put into motion, you will soon enough see that your eCPM is declining, a process we call eCPM decay.

eCPM decay is mostly an inevitable scenario and there are numerous causes of it. The advertiser might not invest as much as you have bargained for. Creatives of low quality guarantee low number of clicks. In other cases, your product might give an overwhelming number of ad impressions causing eCPM to decay. Plus, your user interest should also be considered, because their interest decreases with time.

Holiday season may not be the best time for your earnings

The numbers might not be as good as you would hope for. Winter holidays are the period of time when the consumers are most interested in the numerous ads. Therefore the competition grows and companies place all sorts of ads in the network. The most common result of these hectic efforts is significant eCPM decay.

A campaign overlap is also a common case in the holiday times.

Campaign overlap –what is it exactly?

The term commonly known as campaign overlap happens in case your mobile app uses several ad networks which could be serving your users the same ad. A large number of these networks actually work with the same advertisers. Therefore the best quality ads are mostly the same for all the networks, since advertisers with deep pockets are spreading their budget across all these networks.

The overlap functions so that you can be left with the same ad being opened and displayed far more than it should. Platforms such as Fyber and Supersonic offers solutions to this problem through an approach called ad mediation. Ad mediation is being extremely popular particularly as a solution to the campaign overlap. The platforms function to ensure that just the relevant contents with the best eCPM measure are used, which guarantees the best quality revenues is in place.

As Supersonic VP of Supply Side Adam Ben David says, it is important to know that the possible ad being repeated isn’t always resulting with lower engagement. It can actually be a good thing, due to the case that it sometimes takes several tries to warm up the user so that the ad can be served in the first place.

How to slow down the eCPM decay

Since eCPM decay is inevitable, there are several ways to slow the decay down. You should have a strategy or a plan on how your eCPM can provide you with the maximum earnings. Your strategy for slowing the decay down should include proper timing and placement, eCPM floors setup, ad frequency limitation and cost minimization.

Still, when you think about your strategic movement, do not put all these tips into motion. You should adjust your strategy to the needs of your ads and the audience you aim to reach. The reaction your audience has on the product will have a major influence on eCPM decay. Your attention should also be more aligned to proper eCPM floors than on ad frequency limitation.

Placement

You must take the looks of your product into consideration. How much actual space do you have for the ad within your product? How often will the ad appear, in which of the places? Will the users be annoyed with the ad or will you be making the right decision for ad placement? You will find that this strategic part is not easy to resolve.

Ad frequency limitation

As the placement of the ad is important, the time the user sees the ad is also a good factor to consider. If the user is overwhelmed with a repetitive ad the resulting experience of your product will definitely be negative. Your product could also be completely avoided by the users, resulting in a catastrophic eCPM. Make sure that you are aware of the exact time the ad pops up and its repetitiveness, so that you can adjust it mainly for your product.

CPM floors

The need for you to set up a CPM floor will come at one point while you are evaluating your product, whether it was an app or a game. The CPM floor is the minimum acceptable CPM which you can have at an ad unit level. The minimum CPM is actually the lowest price possible where a bidder can win an impression on your product.

The CPM floor is also an important measure. The variety of its level will have an effect on your product and its success. Set the floor too high - and you’re limiting yourself only to the most expensive of ads. Not that this is a problem on its own, but shutting out cheaper ads means you’re leaving out a large piece of the advertising pie and you'll suffer from low fill rates. On the other hand, set the floor too low, and you’re risking flooding your app with lower quality ads that prompt less clicks, ultimately leading to a less revenue and unstoppable eCPM decay.

Additionally, in case you match the eCPM with the CPM floor you may risk becoming expensive for the advertisers. With matching of these two measures your entire impression number could be lower therefore you would ruin your product’s chances.

What is the right choice? Your decision should be based entirely on your product, its purpose and idea. The best advice in any decision should be cost minimization. A valuable first impression should be your primary goal.

In case you decide to go for a low cost strategy, your products impressions will be left over to the very end. This often happens with reward farmers, the type of players who watch and go through the ads only to get a reward, something valuable in the game.

eCPM decay is inevitable

Although this is true, you must not leave it be. The formerly mentioned pieces of advice should give you an idea on how you can control, and sustain the decay, so that it provides you and your product with the best monetary image. By thoroughly thinking about your product placement and design, the decay can be controlled.

By placing your product and its features including the ad in a properly thought out place, it can improve your product by an enormous amount, and slow down the possible eCPM decay. Stay away from a low cost strategy and providing awards only with ads. They will definitely make your eCPM suffer.