Ads come in many different shapes, sizes, and formats. The question every publisher wants to know is which ad formats should be on my site? The underpinning question being: what will bring in the highest revenue.
Like most things in life, the answer is: it depends.
There are many factors that come into play when estimating CPMs, format is just one of them. Viewability, Vertical, Site Speed, Site authority and ad partners all contribute to the CPM calculus.
While it may be tempting to load your page with a boatload of high-impact ads, videos and the like it’s important to remember that higher impact ads often come with a larger latency load and it may affect your Google ranking and SEO. As well as impatient users (women are worse than men in this case) may bounce from your page without ever seeing an ad. It all comes down to balance. Finding that sweet spot of highly profitable ad formats as well as excellent UX for the user, who it’s really all about.
Table of Contents
- Ad Format Types
- Ad Formats with high CPMs
- Other Factors Affecting CPMs
- Striking a Balance
- NMMs approach to Ad Format selection
- Wrap Up
Ad Unit Types
To start, there are a few categories of ads: display, video, and high impact. Display ads have a lot more variations and types. Video ads are more straightforward, and command a higher CPM than any display type. High impact ads are diverse and unique to the ad partner that develops them. They also command a higher CPM than display.
Display is a catch-all term that include banners, interstitial, sticky and the like. It excludes formats like video and audio and high impact formats. Display commands the lower ends of the CPM spectrum
The following is a list of the standard ad formats. Different ad partners might have other names, and as well as additional features, but the basic concept is the same.
When you think of an internet ad, a banner ad is likely what you envision, a rectangular ad on the top of the homepage when you come to a website. Advertisers coined the phrase “banner blindness” over their ubiquity and how users fail to see them (fun fact the first ever banner ad on Hotwired.com for AT&T had a 44% CTR!). The term is overblown though. Banner ads can still be effective; a solid creative can make anyone look and possibly even click.
Banner ads are still a standard on sites. Despite the cries of its uselessness and death, it continues to bring in consistent revenue for both publishers and advertisers.
Interstitial ads appear at natural breaks in the content. They most often take over the full page and recede once scrolled passed. They are considered highly valuable to advertisers because of their high viewability and creative options.
Rails are on the side of the main content bordering the page. They are out of the central eye view and consequently have a lower monetary value compared to more intrusive ads. Due to their out of view line nature rails are considered non-intrusive and “acceptable” to those using ad-blockers. In that case, they make up in value because there’d be no ad instead.
- Sticky refers to a function where an ad stays in one place regardless of where the user scrolls. The most common are sticky rails and sticky bottoms (banners on the bottom of the page.)
In-feed ads are among the feed content of your site. If you offer recommendations for the next content users should view, including an ad in the form of sponsored video or article is a smart option. Because they are native and have higher viewability and CTR they are more valuable to advertisers.
An in-article ad places ads between paragraphs of your content. They are different than interstitial ads as they are much smaller and less intrusive. This also affects their viewability and consequently value.
Video ads are served in a few ways. There are standalone video units that play only video ads, called outstream video.
The most valuable video ads are instream; they play before video content. These ads have very high completion rates and therefore high CPMs.
In general, video ads command the highest CPM of all ad formats.
Other Factors Affecting CPMs
Ad unit aside, there are other factors that can affect your CPMs. Some of them, you can do something about, others are out of your control.
Depending on the demographic your site attracts, advertisers are willing to spend different amount. Not all demographics are created equal. If your content is geared to moms, you’re in luck. Moms are among the most valuable demographic with their spending power. Millennials are also a highly coveted due to their large population. Gen Z is quickly catching up to Millennials in clout, with their large population, and growing spending power.
Different verticals can command different CPM ranges. News sites are on the lower end and sports sites are on the higher end. This is due to the level of interest in the user. News readers are generally more transient, diverse and likely to skim, this can affect viewability and relevance. Sports readers are more niched and dedicated, spending more time and money on the sites they visit.
Evergreen sites with dedicated audiences generally earn higher CPMs than sites with transient audiences, like news.
This is what it really all comes down to. Forget about the right placements and formats. For the advertiser all they really want to know is: did someone see the ad? Everything they do is toward that goal, to be seen.
Current viewability rates are pathetic, hovering around 55%. But there are things publishers can do to optimize their sites for viewability.
CTR – Click Through Rates
The rate at which users click on an ad and actively converts them affects a publisher’s overall CPM. CTR is dependent on a few factors like the creative and the user profile. There isn’t much a publisher can do to influence this metric, although NMM has and continues to do testing around it. Often, we are successful in finding the best position to increase CTR.
NMMs approach to Ad Formats
NMM understands that like people, websites are individuals, and what works for one site doesn’t necessarily pan out for the next. There is no one size fits all recommendation.
NMM spends about two weeks on each site figuring out optimal ad formats and placements. We follow up once a quarter as the ad-tech world and users are always changing.
There are many different types of ad formats. Video and interstitial will always command a higher CPM, but unit type is just one piece of the puzzle. There are many other factors that come into play when it comes to CPMs, such as vertical, demographics, content, and most of all viewability.
Publishers should experiment with different formats and frequencies to see what works best for their site. An ad partner like NMM takes the guesswork and complexity out of the equation.