The programmatic media buying and selling landscape continues to get traction. In this ecosystem where ads are more likely sold on a CPM basis, one of the questions that arises from a publisher’s perspective is how do you figure out what the right price is to sell your ad inventory. That’s why Libring’s CPM Optimization tool was created, to help you stop leaving money on the table and grow revenue. We interviewed our CTO, Todd Wildman, to spell out what you need to know about the tool.
What is eCPM vs CPM?
Todd: CPM or Cost Per Mille means the price paid to show an ad 1,000 times. A publisher should be focusing instead on a more important metric, effective CPM or eCPM. That’s the money that a publisher is really making for selling 1,000 impressions at the end of the deal recognizing not all the impressions may be effectively sold. eCPM is the amount of revenue a publisher gets based on the agreed upon price, CPM, and the fill rate or number of ads actually shown.
“Let’s take an example of an ad network that pays you $10 per CPM. If this partner is able to return with ads on your app only 50% of the time (a 50% fill rate) then your eCPM will be just $5. For a publisher it is important to understand where inefficiencies may be present either within the source of the ads themselves or within the publishers own ad stack.”
As an aside, Libring also offers the Audit Tool that allows you to compare different components within your ad stack. You can read more about how that works here.
How do you use eCPM to maximize your revenue?
Todd: Knowing your true eCPM allows you to see which ad networks are generating the most revenue for your apps while buying the maximum amount of impressions. Often we see that eCPM varies from country to country, from network to network, from app to app. The Libring platform enables you to quickly break your data per country, app, or platform so you can adjust your app ad strategy taking both the app and regional differences into account. Once you have this level of detail of what is working and what is not you are able to make better deals with your ad partners, optimize your floor pricing or set up a more efficient waterfall depending on your specific monetization approach and ad stack configuration.Of course this level of detail can be a bit cumbersome to look at manually.
“Our CPM optimizer tool will help you find out where you are leaving money on the table. This valuable feature allows you to see where you have opportunities to grow your revenue so you can focus on optimizing them first.”
How does the CPM Optimization Tool work?
Todd: The idea behind our CPM Optimizer is that it looks at the impressions that have been sold in the past through your various sources. If you are working with an ad exchange, for example, what we do is we keep track of the different impressions that have been sold at different levels for a particular country or country tier, ad type, ad format, and obviously the network itself.
“We identify, through our algorithms, your optimal eCPM based on both the highest CPM the partner is offering and the fill rates that partner is able to deliver. It is really an opportunity cost analysis so you can see what is the optimal CPM and fill rate together.”
Why should app companies use it?
Todd: When you’re working with a variety of different ad partners and trying to figure out how to make decisions around where you try to sell those impressions, there is a lot of opportunities to make changes to try and optimize your ad tech configuration. Libring’s CPM Optimizer can help you quickly understand where you are leaving money on the table and where you should look first.
Libring tools serve almost like x-ray of your application to better understand the performance of your app across networks, per country, per platform, per ad type and ad format making it easier to see where and what you need to adjust to improve your results.
Read More about Libring’s CPM Optimizer Tool here.