Have you seen your AdSense earnings suddenly drop dramatically?
If so, you are not alone.
Many publishers are facing seemingly sudden drops in their ad revenue. Specifically, their rate per mile (RPM).
Some of the most common reasons include showing irrelevant ads, unfounded clicks, and even using incorrect keywords. However, determining the actual cause requires an account-by-account or site-by-site audit.
In this article, we’ll discuss Google AdSense, RPM, and why high traffic could negatively impact your RPM.
What exactly is Google AdSense?
Google AdSense is an advertising network created in 2003 for web publishers. The goal is to help publishers monetize their content online.
AdSense is also a closed platform: it pulls ads from the Google Display Network and displays them on the publisher’s website.
Since its release, Google AdSense has arguably become the most popular advertising platform for publishers everywhere. It’s extremely user-friendly, which means you don’t have to be a tech wizard to make it work, and millions of websites are using it, with the number growing every year.
With AdSense, publishers don’t get paid based on ad views. Instead, they make their money using the cost per click (CPC) model. So, every time a visitor clicks on one of the targeted advertisements provided by AdSense, the publisher of the site receives a percentage of the money earned from the click.
As for the numbers, publishers earn around 68% of the payout for each click, while Google takes a 32% commission. To get an idea of what you could earn per click, AdSense provides an income calculator that can help you plan your next step in monetization.
What exactly is RPM?
RPM is the abbreviated term that publishers tend to hear the most when entering the world of programmatic advertising. As mentioned above, the abbreviation stands for rate per thousand, where “thousand” equals 1,000 clicks.
The RPM method for determining pay rates is the most common method used by Google AdSense, as well as most advertising platforms these days.
There are several types of RPMs, but the most common are:
● Page RPM – This is a digital advertising metric that publishers use to estimate how much revenue their site can generate for each thousand page views.
● RPM printing – Impression RPM measures revenue per 1,000 impressions per ad unit.
● Session RPM – Session RPM is also called RPM V, which means revenue per thousand visits, or RPM U where U is defined as users. With session RPM, the more ads a user sees as they scroll through your website content, the more value each individual session grows to the publisher.
These RPM metrics are important ways to help track a publisher’s revenue from advertisements. It also gives publishers a goal they can aim for overtime. However, if a publisher tries to increase their RPMs by adding more ads to a webpage, they may find that the user experience will start to gain momentum.
Why High Traffic Can Lower Your RPM
So, we know that RPM allows users to estimate their potential earnings based on the number of page views they receive. We also know that this metric won’t always be 100% accurate, as a publisher’s pageviews can change dramatically from day today.
This fluctuation is mainly caused by the advertiser’s advertising spending.
So, if something like the price of a keyword drops significantly and a publisher’s highest paying ad displays are based on that particular keyword, their RPM earnings will drop significantly as well.
The announcement, or the availability of impressions, also comes into play when it comes to your RPM. Google AdSense is a reliable platform in that it guarantees to fill impressions. However, if the available inventory at a site increases, it usually means that the publisher will have to accept lower bids to meet the increasing demands.
It ends up being a case of quantity rather than quality, where the extra inventory sells for a lower price just to make sure the spaces are filled and impressions are delivered. These lower-paying impressions tend to drive down the overall average impression payout because there is no pressure or urgency for advertisers to raise their maximum bid.
These impressions, in turn, generate fewer clicks or views, or their pay-per-click or view price is worth a lower percentage due to its low auction price.
The bottom line is that visitors don’t click on irrelevant ads which is why competitive ads are so important. However, the reason for a drop in RPM when there is an increase in traffic is not always that simple.
The problems that end up being the cause often involve neglected site changes. For example, a publisher’s website may have crawling issues. When Google is unable to crawl a web page (which is usually attributed to a robot.txt block), the ads that appear end up being completely irrelevant.
Another potential cause could be coding changes in advertisements. Even the slightest change can have an effect on a publisher’s revenue as it can cause load latency. When the most profitable ads take longer than usual to load, AdSense displays the least profitable ads instead.
There is always a specific reason behind a decline in a publisher’s AdSense RPMs. However, all of these reasons cannot be avoided or helped. A publisher can optimize their content for better click-through rates, which equates to a higher RPM, but there will always be traffic fluctuations beyond their control.