If you are a publisher, you know how important it is to measure the performance of your website. This process allows you to understand if users are satisfied with your site, or if you should optimize it in some ways. There are different performance metrics on the market, but the most effective one is certainly Session RPM (revenue per one thousand sessions). In this post, we will introduce Session RPM and why it is a key metric for publishers compared to other methodologies.
Before explaining what Session RPM is, we should take a step back and analyze three key terms of the analytics environment: Sessions, Users and Page Views. If you use Google Analytics to measure your traffic, you will surely remember reading these three words on the dashboard. Let’s see what they mean and how they differ from each other.
- What are Sessions?
- What are Users and Page Views?
- What is Session RPM?
- 1. Total Revenue
- 2. CPM (and eCPM)
- 3. Page RPM
- 4. Ad Session RPM
- Session RPM: why it is a key metric for publishers
On its support page, 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”. By default, a session lasts until there’s 30 minutes of inactivity, but the publisher can adjust this limit so a session can last from a few seconds to several hours.
Here’s how a session works: when a user enters a website, a session cookie (an ID that identifies that specific session of that specific user) activates. If within 30 minutes the user doesn’t do anything, the session expires, otherwise every time the user interacts with some website element, Google Analytics adds 30 minutes to the expiration time of the current session.
Google will consider all the user interactions that occur within this time frame as a single session. On the other hand, if a user starts interacting with the website, stays inactive for more than 30 minutes, and then performs a new action, the system will count two sessions. It’s also important to notice that this metric doesn’t measure the number of actions taken on the site, such as the number of page views; all the actions taken before the session expires are counted as just one session.
The other two terms used by Google Analytics to measure website performances are Users and Page Views.
Measuring Users means counting the number of unique users that browse a site. When a user enters a website for the first time, Google Analytics creates a user ID (a cookie) that remains stored in the browser for two years from the last access. Note that a cookie identifies a user on a specific browser. Therefore, if a person visits a site using Google Chrome and, the day after, using Safari, he will be counted as two different users. Same if he uses different devices, say a pc and a smartphone. Furthermore, counting users is different from counting sessions: a user could perform multiple sessions in two years, before his user cookie expires.
Last but not least, page views. As the name suggests, this metric counts the number of pages viewed by a user. Counting page views is different 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. A useful alternative to page views is the “Unique Page Views” metric, which eliminates multiple views of the same page within one session. So, when a user visits the same page many times in a single session, the system will count only one unique page view.
Now that you understand the difference between these three analytics methodologies, we can go back to Session RPM.
Session RPM stands for “revenue per one thousand sessions”, that is how much a publisher earns from 1000 sessions on his website. You can calculate this metric by dividing the total revenue from all the sources and sessions by the number of sessions, and then multiplying the result by 1000. So:
It’s a very important metric to understand if ads on a website are performing well. Differently from other metrics, Session RPM shows “revenue per session”. The number of sessions can change because of fluctuations and depends more on content, distribution and SEO factors. Session RPM, though, doesn’t consider the absolute number of sessions, so it manages to reflect exclusively the effects of the monetization and user experience strategy.
To better appreciate the reliability of this method, let’s compare it to four of the most common metrics on the market.
The total revenue of a website is generally a good metric, but in many cases, it may not be accurate. For example, it can be influenced by traffic fluctuations. Let’s consider the case of a publisher who decides to add an ad unit to a web page but, after doing so, the site suffers of a substantial drop in traffic, perhaps seasonal or anyway unrelated to the ad unit. This traffic variation could make the total revenue falls, even though the new ad unit could have potentially brought additional earnings. In such a case, looking at the total revenue is not the best way to measure the success of a strategy.
CPM (cost per one thousand impressions) is typically used by advertisers (indeed it’s related to “cost”, not “revenue”), but it’s quite popular also among media owners. It defines the price a brand pays to buy a specific ad unit. 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 less earnings than another brand that pays lower CPMs but has a higher “fill rate”.
To solve the “fill rate” issue, some publishers use a different metric: eCPM (“effective CPM”), which is the ratio between total revenues and ad request, multiplied by 1000 (revenue/ad request*1000). But this method is not perfect either, as it doesn’t provide a broad view of the publisher’s earnings, focusing on the economic value of the single ad units instead. For instance, a web page has one ad unit with an eCPM of 2 euros. To the same page, the publisher adds another unit with an eCPM of 1 euro. Looking at the eCPMs would highlight the value drop of the second unit, rather than the extra revenue it provides.
As we discussed above, there’s a difference between sessions and page views. Some media owners (mainly those who use AdSense) measure their property’s performances by Page RPM, which stands for “revenues per 1000 page (views)”. Compared to CPM and eCPM, which focus only on the value of single ad units, Page RPM is a more “advanced” metric, because it takes users’ activities into account. Nevertheless, it has an important limitation: it does not consider the negative influence a change in user experience could have on the number of page views, and ultimately on the revenue too. For example, a website has on average a Page RPM of 2 euros and 3 pages per visit, and its owner decides to add a new ad unit, increasing the Page RPM to 4 euros. This change in the user experience makes the page views drop to 2 per visit. Looking at Page RPM, instead of Session RPM, doesn’t allow the publisher to notice that its total revenue has actually reduced.
There’s also a metric, introduced by AdSense, that is quite similar to Session RPM: Ad Session RPM. This term stands for “revenues per 1000 AdSense Session” and is calculated by dividing the total revenue by the number of AdSense sessions, multiplied by 1000. Obviously, the main limitation of this method is that it considers just AdSense campaigns, so if the publisher moves an ad unit from Google to another partner, the Ad Session RPM will decrease, even if there is no actual drop in the revenue. Furthermore, this metric doesn’t consider the impact of some external factors, such as the usage of ad blockers, on the number of ad sessions. Indeed, if many users adopt ad blockers, the Ad Session RPM will probably remain unchanged, while the total revenue will drop.
It’s quite clear, now, that Session RPM is the most effective among all the metrics. 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.
Clickio offers publishers a deep analysis of the Session RPM. Through a Layout A/B testing we allow publishers to test different page set ups, one with more ad units, one with less, calculating sessions and relative revenues. Contact us if you want to have more information.