Average Revenue Per Visitor (ARPV) is a one-for-all metric that has been successfully used by publishers to deal with dying third-party data, increasing ad blocks and to increase ad revenue.
I. Average Revenue Per Visitor (ARPV):
Average revenue per visitor is a measure of total revenue generated by the website each time a visitor land on the website, irrespective of channel, that is, be it via affiliate links, ad clicks, sponsorships and so on.
It is to be noted that Average revenue per visitor or ARPV considers the unique visitors who visit the site. In other words, every individual visiting the website is regarded as one visitor; visits are not considered as the number of visitors.
Synonymous to ARPU (average revenue per user), ARPV is a relatively more popular term that provides extensive insight into how each visitor from different channels contributes to the payment.
Frequently used metrics in e-commerce, ARPV or ARPU open the doors to measure sustainable growth of revenue.
II. How to measure the Average revenue per visitor?
ARPV is the most widely used metric, and KPI is simple to calculate. The formula used is:
The total revenue generated is divided by the number of visitors.
Average Revenue Per Visitor = Total Revenue / Number of Visitors
If the total monthly revenue is 40000$, with 4000 visitors, the average income contributed per visitor will be 10$.
This implies that per thousand users, 10000$ revenue is generated, which predicts how profitable the ad campaign is running and which segment of visitors contributes the most, along with the channel the revenue is coming from.
TOTAL REVENUE includes all the channels, including:
Affiliate links paid campaigns, subscriptions, newsletters and emails.
III. Why is Revenue Per Visitor Important?
Keeping track of average revenue per visitor is a powerful weapon in the hands of the publishers, which offers an insight into:
- Workable and non-workable ad campaigns:
Average revenue per visitor lets the publisher dive deep into the ad campaigns which provide the most user engagement (eventually revenue) and filter out the redundant ads that fail to acquire users.
- The channel which contributed the most:
Since, average revenue per visitor is the measure of total revenue contributed by various channels, this metric also helps a publisher review which platform is bringing them the most profit.
- Understand the dynamics of visitor’s behavior:
For every website to flourish, understanding the visitor’s intent is paramount. ARPV enables tracking each visitor by analysing the type of ad content they engage with to further provide them with related content. Consequently, user experience is enhanced as well.
- Tracks the effectiveness of the sales funnel:
ARPV is one of the best tool for publishers to observe the reasons for visitors abandoning the carts before making a purchase, thereby calling publishers to rectify the issues.
IV. Strategies to Improve Average Revenue Per Visitor:
To understand the website’s overall health, improving ARPV is the first step, followed by higher conversion rates, user experience, and more user acquisition.
Here’s how publishers can optimise average revenue per visitor:
- Offering add-ons with purchases:
Average revenue per visitor can be improved if the users visiting your site, availing the service or purchasing the product find it worth the value.
Recommending to buy add-ons or suggesting an upgrade by shelling a little more can entice the visitor to buy the product. By suffering visitors to buy related items, they can be encouraged to purchase more.
For instance, offering an upgrade in the computer for 50$ more or displaying a wireless mouse while purchasing a laptop can make the visitor buy more, increasing RPV.
- A/B testing ad campaigns:
Website fraught with frictions in complex checkout methods, slow page loading, and unclear payment options will suffer adversely in generating revenue per visitor.
Therefore, experimenting with website and ad campaign launches can help the publisher provide a blueprint for which version is more data-driven, inviting more conversions, click rates, and higher, thus high ARPV.
- Optimizing website:
Aligning the website’s content and keywords as per the current trends can effectively boost average revenue per visitor. Optimization can include:
- Refining the title tags
- Becoming more descriptive and specific
- Answering specific questions
- Targeting loyal and frequent customers
- Offering rewards and discounts:
As per the leading marketplace, Retailmenot, approximately 2/3 of the present generation looks for the offer and deals before checking out.
Roughly 80% claim to try something new if offered a discount.
These statistics prove that discounts and offers provided on the services or products are the game changers in increasing revenue per visitor.
- Customer intent-based content:
The website is useless if it does not cater to what the customer is looking for. Thus, delivering the content based on consumer behavior and interest is the best way to enhance RPV, as the click-through rates will improve.
- Setting up email campaigns
Launching email campaigns is another strategy to overcome reduced revenues. By targeting the customers through emails reminding them of abandoned shopping carts, the latest offers based on their searches, offering lucrative subscriptions, publishers are bound to grow their revenue.
- Addressing ad blocking:
Ad blocking has caused a significant loss in revenue over the past few years, with figures accounting for a staggering 30 billion dollars, according to Digiday. Addressing this greatest challenge can help the website to flourish.
Click here to learn how to recover revenue lost due to ad block.
V. How to use ARPV for strategic decisions?
Understanding the importance of average revenue per visitor can help the business grow as it assists in various decisions taken by publishers.
Using ARPV for predicting revenues:
The overall health of the e-commerce business is revealed through ARPV. This metric is an indicator of the new traffic coming in and what can be further offered to the new visitors to turn them into conversions.
This particular metric is solely responsible for changing the course of investments in unique visitors and ad campaigns to enhance revenue in the future.
ARPV serves as a goal setter:
ARPV helps in planning and predicting the changes that will improve revenues and sets long-term measurable goals. It can help plan a pathway that will best lead to completing the website’s goals.
For analysing segmentation:
ARPV is a metric that assesses which segment of visitors brings in more revenue and what can further be done to improve their engagement, eventually leading to user retention.
VI. Where to get help to grow your ARPV?
Websites thrive due to user satisfaction, which helps them grow in terms of traffic, revenues and website site.
Above-mentioned tips can be incorporated by all the publishers to maximise their ad revenues. You can also partner up with Ad revenue optimisation platform such as Adpushup.
Adpushup is empowered with the latest technology to provide better click-through rates, higher viewability, round-the-clock insightful reporting, better user experience, and guaranteed ad revenue uplift.
VII. Frequently Asked Questions
To calculate RPV, divide the total revenue earned by the number of visitors during the same period.
AOV stands for Average Order Value (the average amount generated from each order placed by customer). RPV stands for Revenue Per Visitor (the average amount of revenue generated from each website visitor).