Overview

Definitions

Revenue

Ad revenue/advertising revenue, is a specific type of revenue that is generated through advertising activities. It refers to the income earned by a company by displaying advertisements to its audience or users. Ad revenue is typically derived from advertisers who pay to have their advertisements shown to the target audience. This can include various forms of advertising, such as display ads, video ads, or in-app ads.

As a metric, ad revenue is used to measure the financial performance and success of a business, particularly in the context of generating income from advertising activities. This metric provides insights into the effectiveness of revenue-generating strategies, and its ability to attract advertisers.

In some cases, in order to properly evaluate the effectiveness of revenue-generating strategies, looking only into revenue may not be 100% accurate. Revenue typically is strongly connected with traffic fluctuations. For example, if you add a new placement to the web page, and coincidently at the same time your site suffers from a traffic loss unrelated to the new placement implementation (like seasonality, vacation period, holidays, outage), then you may see a drop in revenue, however, your new placement will bring you still an added value. In such cases, we recommend looking at the total revenue in combination with other metrics like RPM, CPM, and fill rate.

Auctions

An auction is an attempt to sell an impression and get a paid ad in return. During the auction, ad calls (bid requests) are sent to Ad-Networks through various channels, and the bidder that provides the highest bid wins the auction and is able to show a creative in the ad space. The process is typically executed within milliseconds to ensure a seamless user experience.

It maximizes revenue for publishers and increases competition among ad buyers. It allows publishers to access a larger pool of demand sources, driving up ad revenue and providing more control over their inventory.

If no Ad-Network is interested in participating in the competition, the auction results in an unfilled impression. An auction can bundle ad calls of multiple placements.

Page Views

Page Views are the number of times users view a web page with at least one auction. Pageviews are an important metric for website owners as they provide insights into the overall traffic and user engagement on a website.

Counting page views differs from counting sessions because a user could visit multiple pages within one session. And it’s also different from counting users because the same user could view many pages. In fact, if the same user opens two different pages or even refreshes the same page, two page views will be counted.

User Sessions

A user session refers to the period of time during which a user interacts with a website, application, or online platform without any prolonged inactivity. It starts when a user accesses the website or application and ends when there is a significant period of inactivity, such as when the user closes the application or remains idle for a predetermined amount of time.

Google defines a session as “a group of user interactions with your website that take place within a given time frame. For example, a single session can contain multiple page views, events, social interactions, and ecommerce transactions”. A session lasts until there are 30 minutes of inactivity.

Here’s how a session works: when a user enters a website, a session activates. If within 30 minutes the user doesn’t do anything, the session expires, otherwise every time the user interacts with some website element, session tracking adds 30 minutes to the expiration time of the current session.

Unlike Google Analytics user sessions, user sessions are only counted if at least one ad is shown.

Impressions

Impressions are equivalent to Served Impressions. The standard for calculating an impression is measured when the advertisement or link is fetched and loaded on a web page. The metric associated with accounting for served impressions is easy to calculate, as the data is highly trackable by the server— did it load, or did it not.

The difficulty of accounting for impression value using this method is that it does not include the actual display of the ad, or define the impact of the impression on the viewer. The analysis does not incorporate whether the ad was in a viewable location or actually seen by the consumer, it merely registers that the ad was fetched and the load was initiated.

Served impressions may include a page that the viewer closed before the ad completed loading, or perhaps the viewer scrolled past the ad before it fully loaded. Other impressions that are included in the views, yet have no marketing value, could be a page with ad-blocking software enabled, a page opened by a robot (proxy server, crawler, spider, or fraudulent click bot), a website with mobile incompatibilities, or broken plug-ins that prevent the ad from being displayed.

Unfilled Impressions

Unfilled impressions or blank impressions happen when no demand partner is interested in the impressions and send a no-bid response, due to geo, size, viewability, floor prices, or similar. In that case, the placement is either shown blank or backfilled with house ads.

Placement Page Views

The number of page views when a placement was loaded. In contrast to page views, which count each page view where at least one placement is shown, this counts the page views where a placement is shown. This metric can be used to see how many page views an ad was used.

The Placement Page View counter is typically smaller than the Page View counter. An exception to this rule is when grouping placements by metadata, for example by position, in this case, the sum of the individual placements might be bigger than the Page View counter.

Page RPM (RPM)

RPM is an acronym for Revenue Per Mille (mille means “thousand” in Latin) which is basically “revenue per 1000 page views” of a web page. The metric provides a comprehensive view of how the ad setup of a site is performing.

Unlike CPM, which calculates the rate/price per ad unit, RPM is aggregating all ads on the page and calculates a rate. For example, If you have 4 ads on a page your RPM will be higher than if you just have 2. RPM doesn’t represent how much you have actually earned; rather, it’s calculated by dividing your estimated earnings by the number of page views, impressions, or queries you received, then multiplying by 1000.

RPM = (Revenue / Page Views) * 1000

Session RPM (RPS)

When a page loads in your browser, the system counts that as a page view, while a session is the period of time a reader is active on your site. RPS will always be higher than RPM, even though overall earnings are the same. In the ad tech industry, it’s pretty standard that RPM = page view RPM, but some ad providers use session RPM (in other words, RPS) so it’s important to know what each provider means when referencing RPM.

Publishers should pay attention to RPS because it provides a comprehensive view of how their site is performing. RPS looks into critical factors impacting site monetization like ad viewability, fill rate, refresh rate, ad density, page speed, etc.

Differently from the others, it shows exclusively the effects of the monetization and user experience strategy, limiting the influence of other external factors. Additionally, it offers a broad vision of the publisher earnings, beyond the economic value of the single ad units.

Measuring your website Session RPM is the right way to understand if there’s room for improvement in your monetization strategy, or if an action you have taken is bearing fruit or it needs to be adjusted. And it’s also important to measure Session RPM separately for the Desktop and Mobile versions of the site, as layouts and interaction patterns tend to be very different depending on the device used.

RPS = (Revenue / User Sessions) * 1000

Placement RPM

Revenue per placement normalized by Placement Page Views, i.e. pages where a specific placement is used. Compared to RPM, which gives the value of a placement compared to the overall inventory, the Placement RPM helps to compare the value of placements to each other, independent of how often they are used.

Placement RPM = (Placement Revenue / Placement Page Views) * 1000

CPM

CPM is an acronym for Cost Per Mille (mille means “thousand” in Latin) and is the ad unit rate per 1000 ad impressions. It is the price advertisers pay to have their ads shown 1,000 times. However, high CPMs do not always correspond to overall success for the publisher. For example, a brand that pays a high CPM but only fills 50% of the available inventory may result in fewer earnings than another brand that pays lower CPMs but has a higher fill rate.

CPM = (Revenue / Impressions) * 1000

Fill Rate

The ratio between Impressions and Unfilled Impressions. The ad fill rate is one of the simplest ways to tell whether or not an ad request has been a success. While aiming for a 100% ad fill rate seems like a goal there are reasons why this is not achievable and even not desirable. Every advertiser is particular about getting their ads across to their target audience which means that not all ad calls will receive placements.

By using floor prices to achieve a higher CPM and ensure high-quality ads a 100% fill rate is not the goal. On the contrary, a 100% fill rate may sometimes translate to low-quality ads.

Fill Rate = Impressions / (Impressions + Unfilled Impressions)

Placement Coverage

The ratio between Page Views and Placement Page Views. The placement coverage is a simple way to tell how often a placement is used across the inventory. Some placements will only be used on specific pages, due to missing declarations, targeting, or size mapping, and therefore revenue will be limited by only those pages showing them.

The coverage will give you information on how often the placement is used and how much influence it typically has on the overall revenue. This metric can help to optimize highly valuable placements to increase their usage and result in higher revenue.

Placement Coverage = (Placement Page Views / Page Views) * 100