So: you’re a social games developer who’s now fine-tuned the model– your game is appealing enough to continuously attract new users and engaging enough to sustain high retention rates, and you’ve integrated monetization of virtual goods in such a way that anyone could see the benefit and value in spending actual money on your game’s currency. Maybe you’ve even set up alternative payments to provide another way for generating paying users. Your MAUs are in the hundreds of thousands– yet whenever you log in to check, your CPMs are low. Sometimes, dismally low.

What could have possibly gone wrong?

CPM factors: A/S/L?

If your CPM is a number that tells you how much revenue you’re generating per so many users, it should come as no surprise that CPMs are affected by (hey!) your users– namely, who your users are and in what part of the world they live.

• Age: How old are your users? Are they mostly kids under 18 or middle-aged 9-to-5-ers? Younger demographics are less likely to have their own credit cards and will often require parental consent for a legitimate transaction to go through, so if this is to whom your game predominately caters, daily CPMs could be lower than your game model might otherwise predict. As the user age goes up, so does the likelihood of users buying, with those in the 25-40 range being the most willing to spend.
• Sex: In the world of stereotypes, gamers are male, people who spend a significant amount of time on the computer and online are male, so correspondingly, online gamers must be male. In the world of reality, however, females steadfastly hold an equal share in the casual-gameplay market, and according to Tina Tran of Girls In Tech, women are “making up 75% of the population that pays to play.”
   
  Does this mean that games whose users are mostly male won’t make any money? No; it just suggests that the more women (or, taking the above into account: the more older women) a user base contains, the higher the percentage of paying users will be, leading to increased CPM.
• Location: You feel like your game could have a global appeal, so you’ve gone ahead and translated it into 15 different languages (with 20 more to be added soon), and it’s worked! Your international traffic is skyrocketing– but now your CPMs are plummeting. Did you remember to make sure that as your game added support for more and more countries, your payment options followed suit?
   
  Your users might be coming from the 190 markets that Paypal services, but Paypal might not be an appropriate service for them, as it requires either a bank account or credit card. If you provide a mobile payments option, do the countries your mobile payments provider supports match the countries from which you’re seeing a high volume of traffic? If you provide alternative payments, are there a lot of offers available for those countries? Your users may be in a position where they’d be more than happy to give you their money, but they have no way to do so, and this will effectively bring down your CPMs.

Other factors that affect CPM

Timing is everything

When was the last time you checked your stats? Five hours ago? Five minutes ago? Maybe you should check them right now. Are numbers up? (Rejoice!) Are they down? (Despair!) Wait. Check again– anything new now?

CPMs– like the stock market, foreign exchange rates, blood pressure, or even brainwave activity– are not static throughout the course of any given day, and if you obsess over your real-time numbers and react to every fluctuation, you’re bound to be in for an emotional roller-coaster ride. Dramatic changes are worth concern, of course, but for the most part, CPM will naturally rise and fall throughout the day, particularly if you have a widely-varied user base.

If most of your users are still in school, you can’t expect your reports to show much at 11 a.m. on a weekday. Similarly, if most of your paying traffic comes from Germany, expect numbers to be lower when you check stats at 7 p.m. Pacific time; that might be a prime revenue-generating hour for the U.S., but where your users are, they’re still fast asleep.

Advertisers make mistakes, too

Alternative payments aren’t a flawless system, and so it happens that sometimes a user will complete an offer but not receive credit from the advertiser associated with that offer for doing so. Until this discrepancy is resolved, then, CPMs are artificially lowered, as the user has now generated revenue that has yet to be credited to the game.

In conclusion

If you use CPMs to measure your game’s monetary success, take some time to look into the comprehensive factors behind the numbers instead of just taking them at face value.

• You can tailor a game to perfection, but if you fail to pay attention to who’s playing your game, your CPMs are bound to stall at some point. Make sure that your payment options support your users. If they’re young, consider mobile payments (as younger users are more and more likely to have a cell phone these days) or age-appropriate offers that don’t require a credit card. Or, if they’re in foreign countries, look into payment providers that work in global markets but don’t require a credit card and consider showing more offers that take that international traffic.
• Instead of thin-slicing, look at the bigger picture. Don’t make comparisons in numbers hour-to-hour, but rather day-to-day, or even week-to-week (as weekday performance is commonly better than weekend performance). Then, taking into account any changes to the game’s development or user base, you can form your conclusions and act accordingly.

• What is CPM?: Looking at the factors that affect this number (Part I)
• Ignore Cougars, Follow the Money: 3 social gaming tips for monetizing younger users
• F-ck your offers! Game-ending user complaints & 3 developer solutions