The Publishers' Guide to Ad Revenue

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Ad Revenue Guide

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TL;DR

Introduction

  • Advertising revenue is the most common monetization model for publishers.

  • There’s a reason for that: Global ad spend is huge, and even a tiny sliver of that pie can amount to millions.

  • Various strategies and tactics can increase ad revenue once you have digital ads up and running.

From the commercial messages scrawled on Ancient Egyptian papyrus to digital billboards in the metaverse, advertisements have always been about revenue for the publishers who run them. Ad revenue was the primary monetization model for even the earliest newspapers, and just as newspapers were fading from their days of glory, digital publishing entered the stage. That’s when ad revenue really took off as a monetization model to become what we know it as today.

From the commercial messages scrawled on Ancient Egyptian papyrus to digital billboards in the metaverse, advertisements have always been about revenue for the publishers who run them. Ad revenue was the primary monetization model for even the earliest newspapers, and just as newspapers were fading from their days of glory, digital publishing entered the stage. That’s when ad revenue really took off as a monetization model to become what we know it as today.

It’s the multi-billion dollar industry that fuels the bottom line for giants like Google, Facebook, YouTube, and Twitter. It’s how thousands — perhaps millions — of digital publishers of all sizes bring in money to support their content creation efforts.

But for many publishers — especially those who are in the early days — ad revenue feels inaccessible as if it were a far-off dream and not a necessary reality right here in the present. To survive as a publisher in the digital age, ad revenue almost has to be a part of your monetization strategy, and bringing in ad revenue isn’t as hard as you think, especially when you use the right strategies, tools, and partners.

This guide is going to give you everything you need to know to start bringing in ad revenue, optimize your digital advertising strategy and understand how to go from where you are to where you want to be as a publisher. Read on to learn more.

Some ad revenue is good, but to truly reach the next level, you need maximum revenue. That’s exactly what publishers who work with Playwire get. If you’re ready to maximize your revenue, contact us.

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Defining Ad Revenue

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It's always a good idea to start on a solid foundation with a clear, simple definition. So, what is ad revenue?

What Is Ad Revenue?

Ad revenue is the money publishers earn from advertisers for placing advertisements on their publishing channels. Ads in and on websites, apps, over-the-top (OTT) channels, connected TVs (CTVs), videos, social media channels, podcasts, magazines, newspapers, billboards, buses, and even park benches generate revenue for publishers or business owners.

The reason this exchange between advertisers and publishers has become a global industry valued in the hundreds of billions of dollars is that it offers clear value: Publishers have reach with particular audiences, and advertisers can pay those publishers to reach their audiences. It’s clean and highly effective — everyone wins.

10 Mind-Blowing Ad Revenue Statistics

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If you're a publisher who is toying with the idea of implementing ads on your platform or someone who has only passively set up and managed basic digital ads, you may need a boost of motivation to get you to the next phase. These 10 incredible ad revenue statistics are sure to get the blood pumping:

$763.2 billion

That’s the total ad revenue that publishers of all kinds across the world earned in 2021.

$455.3 billion

 That’s the portion of total global ad spend that went to digital advertising in 2021.

$238 billion

That’s how much brands and ad agencies spent on display advertising in 2021.

$209.5 billion

That’s the total ad revenue Google made in 2021.

$148.8 billion

That’s the total revenue of the United States advertising industry in 2021.

$89.6 billion

That’s the amount experts believe will be spent on display video advertising in 2024.

3,086%

That’s how much spending on online video advertising increased around the world between 2007 and 2021.

1,610%

That’s how much spending on display advertising increased around the world between 2007 and 2021.

38.3%

That’s how much the digital advertising market in the U.S. grew in 2021, making it the fastest-growing market in the world.

15.6%

That’s how much global advertising spending increased in 2021.

 

For even more incredible statistics, check out our article on online and mobile ad revenue statistics.

Key Terms & Definitions Related to Ad Revenue

Even if you have an in-depth understanding of what ad revenue is, you may not have a fully formed understanding of all of the vocabulary that surrounds this important concept. This quick ad revenue glossary will help with that.

 

Impression

An impression is an instance in which a user lays eyes on an advertisement. When used in an ad sales context, an impression is the potential that a user will see an advertisement.

 

CPM

Cost per mille (CPM) is the amount an advertiser pays a publisher for every 1,000 impressions on their ads. CPM rates can vary widely, depending on the vertical, publisher-side optimization strategies, and various other factors.

 

CPI

A metric commonly used with in-app advertising, cost per install (CPI) is the amount an advertiser pays a publisher when one of the publisher’s own app users installs an app they saw advertised on the publisher's app.

 

CPV

Cost per view (CPV) is the amount of money a buyer pays a publisher for each time their video ad is viewed within the publisher’s platform. A view may not count toward revenue for the publisher unless the user completes a certain amount of the ad before skipping it or exiting.

 

ECPM

Effective cost per mille (eCPM) is similar to CPM, but it focuses more on how much money the publisher has actually made from 1,000 impressions on average, rather than simply what the advertiser paid for 1,000 impressions.

Even if you have an in-depth understanding of what ad revenue is, you may not have a fully formed understanding of all of the vocabulary that surrounds this important concept. This quick ad revenue glossary will help with that.

 

PV CPM

Page view CPM (PV CPM) is the gold standard metric for ad revenue for publishers. To get this amount, you’ll take your total ad revenue over a given period of time, divide it by your number of page views over the same time period, then multiply by 1,000 to get an effective page view CPM.

This metric helps to remove any effects of increases in page views (which is still great!) from your calculation to help you truly understand how your ads are working or improving.

 

YIELD

Yield is simply how much ad revenue you earn from an ad. Large publishers hire or outsource yield operations (yield ops) teams to constantly optimize for higher yield across the publishers’ advertising efforts.

 

INVENTORY

Your inventory is the ad space on your website, app, or other channel. Buyers purchase particular pieces of inventory in which to run their ad creative in front of your users.

 

DEMAND

Demand refers to the buyers — brands, advertisers, agencies, and similar entities — who may purchase your ad inventory. Demand can come from supply-side platforms (SSPs), ad exchanges, ad networks, and direct sales. As a general rule of thumb, having broad demand for your inventory means you will make more revenue.

 

PRICE FLOOR

Your floor price is the lowest price for which you will sell a particular piece of your ad inventory. A high floor price ensures higher revenue for each impression sold but may limit sales. A low floor price may lead to more sold impressions but less revenue for each sale on average. You can actively set and change your floor price to optimize for higher yield.

 

PAGEVIEW

This term refers simply to a user viewing a page on your website. Your number of page views over a specific period tells you about your overall traffic and can inform the prices you set for your digital ad space.

 

FILL RATE

Fill rate describes how often your website or app requests an ad vs. how often an ad is shown. You generally want your fill rate to be high to avoid unsold impressions, which result in no revenue for you. But, keep in mind that 100% fill rate usually means that you sold your revenue at rock bottom prices and may have actually reduced your total revenue. Balancing fill rate and CPM is both an art and a science.

 

AD UNIT

An ad unit is simply a style or format for an ad. Different ad units may command different CPMs or work better for certain publishers, platforms, and advertisers. Common ad units include display banners, pre-roll video ads, mid-roll video ads, post-roll video ads, rewarded video ads, and native ads.

 

SDK

A software development kit (SDK) is a piece of code that allows your mobile app to connect to and integrate with various technologies — many of which are related to digital advertising. For example, to begin running video ads on your app, you may need to integrate the SDK of the video ads partner you have chosen to work with.

 

CLICK-THROUGH RATE

This term can have slightly different definitions depending on the context in which it is used, but in digital advertising, click-through rate (CTR) refers to the rate at which users who see an ad actually click on it. A high CTR can be a positive indicator to a buyer that their ad has performed well on a publisher’s platform.

Types of Digital Ad Revenue

Ad revenue can refer to money made from advertisements across all kinds of media,

including physical media like newspapers and billboards. However, when you’re talking about what ad revenue is in the 2020s, you’re almost always talking about digital ad revenue.

That’s revenue from ads run on digital platforms. Thanks to the vast ocean of creativity and innovation the internet has brought to the fore, we now have several ways to earn ad revenue in the digital world. We explore each of those types of digital ad revenue below:

Programmatic Advertising Revenue

Revenue that reaches publishers through programmatic advertising is relatively new — the technology that powers programmatic advertising was invented around a decade ago — but it changed everything for publishers.

That’s because programmatic advertising automated much of the digital advertising process, allowing publishers to sell impressions at scale through real-time bidding. Here’s the basic process:

  • A user unknowingly initiates an auctionable impression by visiting a website, opening an app, watching a video, or something similar.
  • The publisher auctions that impression, using an SSP to send the impression out to bidders.
  • Using a demand-side platform (DSP), buyers offer automatic bids for the impression.
  • Either the first acceptable bid (standard programmatic waterfall auction) or highest bid (header bidding auction) wins the impression.
  • The winning bidder’s ad is served to the user who initiated the entire process.

That all happens in a fraction of a second. Although players on both sides of the equation manually manipulate settings and auction rules, the rest is automated. Revenue flows through the programmatic system, losing small cuts to SSPs, DSPs, and advertising partners along the way until it reaches the publisher.

Performance-Based Ad Revenue

While the vast majority of programmatic and direct ad revenue is based on the number of eyeballs you can get on a buyer’s ads, that’s not the only model for bringing in ad revenue. There’s a whole world of performance-based advertising to explore.
 
Performance-based ad revenue only comes to publishers when they run an ad that triggers one of their users to complete an action of some kind. It might be downloading an app that was featured in the ad, filling out a form, clicking through to the advertiser’s site, or even making a purchase. In any case, you’re not getting paid for impressions — you’re getting paid for performance.
 
This kind of arrangement is particularly popular with in-app advertising. Most, but not all, ads in app-based games and similar apps are for other apps, and the primary goal is to have the publisher’s users download the advertised app. When they do so after seeing the ad, the publisher who ran the ad gets paid.

Direct-Sold Advertising Revenue

The old-fashioned insertion order (IO) didn’t die when programmatic advertising revenue started hitting publishers’ bank accounts. It merely evolved. Today, direct-sold ads can provide premium demand for publishers’ inventory — meaning you get top dollar for the inventory you’re able to sell directly to buyers.

As it was in the pre-digital days, doing direct sales is all about relationships with solid buyers. When it’s done right, it serves as a high-value complement to programmatic revenue. These kinds of deals are worked out in video calls and handshakes, but they end up flowing through the same systems that programmatically sold impressions do: DSPs, SSPs, servers, and other lovely pieces of ad tech.

Ad Revenue for App Publishers

Apps are a part of our everyday lives today, but they are still relatively nascent in the world of digital ad revenue. We now have header bidding for apps and plenty of innovative ad units to run, but the industry is still getting a feel for the real revenue potential for app developers.

In general, however, if it’s available for web publishers, it’s available for app publishers. Developers can incorporate one or various SDKs to incorporate all kinds of header bidding demand and gain access to high-value ad exchanges, and revenue flows through the programmatic system in much the same way it does for desktop publishers.

Ad Revenue for Web Publishers

In the early days of digital advertising, web publishers had only a couple of options for bringing in ad revenue: Run a banner ad across the top of their site, stick an ad in the sidebar or some similar arrangement. Those kinds of ads still hold a lot of dominance in the modern digital advertising landscape, but there are many more options now.

For example, the advent of online video has opened up an entire new world — and shiny new ad revenue stream — for web publishers. Video ad revenue can come from monetizing your video content with pre-roll, mid-roll or post-roll video ads, or you can simply add a small video player to play only ads inside your text or image content.

Meanwhile, ad units for web publishers have simply gotten more advanced. Now, publishers can run native ads that provide unique value to buyers, or they can go all-out with web-rewarded video (a Playwire exclusive).

Programmatic advertising in general and header bidding specifically changed the game for web publishers in a big way, too, but direct sales still play a big part in revenue for mid-sized to large publishers.

Ad Revenue for OTT and CTV

If app revenue is in its infancy, revenue from OTT and CTV ads just came home from the hospital. OTT and CTV publishers are in that golden stage of explosive early growth as Rokus, Apple TVs, and similar devices proliferate in households around the world.

Obviously, these channels for ad revenue are video-specific. While there is some opportunity for skinned ads and home screen banners, most of the revenue from this arena is going to come from video advertising. Fortunately, a rapidly growing number of advertisers are interested in the unique brand exposure OTT and CTV channels can provide.

How to Start Earning Ad Revenue

If you’ve read this far, you’re probably convinced that ad revenue needs to be a key part of your monetization strategy. So, where do you start?

 

Consider Whether You're Ready

The answer to that question depends on how far you have already come. If you just got your website live a couple of weeks ago, you’re in a very different position from someone who is averaging 1,000,000 page views per month.

There’s an element of balance here — you have to balance your goals with your earning potential and your audience’s willingness to view ads on your website or app. In truth, if you have only just started, the setup and management required to bring in consistent ad revenue may not be worth the time because your audience isn’t yet large enough to generate any meaningful amount of money.

If yours is a hobby site that doesn’t have to pay the bills, that may be fine for you, but you may have other, grander goals that will dictate when and how to start earning ad revenue. Here are some of the common goals of today’s publishers, each of which necessitates a different ad revenue strategy:

  • Build an audience while creating content you like, without much focus on revenue.
  • Cover the costs of content creation with your ad revenue.
  • Grow your ad revenue to the point that you can quit your day job.
  • Bring in enough revenue to allow you to acquire more websites or apps and grow your company.
  • Be acquired yourself for the highest price possible.

You may want to completely hold off on adding advertising to your website or app until you have a significant enough audience to generate meaningful revenue. What tools are going to make sense to help manage your ad revenue will change as your audience grows.

If you are a website publisher with less than 500,000 page views or an app developer with less than 10,000 daily active users, you’re likely going to get the best ROI (investment of time vs. revenue produced) from Google’s standard set of tools.

As you crest the 500,000 page view or 10,000 daily active user mark, you’ll want to start looking into either building a more advanced ad tech stack or working with a monetization partner.

How to Get Started

When you’re ready to start bringing in ad revenue, you are more than likely going to find that you have hundreds of options. Every ad network, exchange, and other ad tech tool wants you to believe that they are the right fit for you.

(Playwire is a platform that can help with this, but we typically work with mid-sized to larger publishers. Find out more about who’s a fit for Playwire here.)

Unless you have a massive audience, your choice is probably simpler than it initially feels. In most cases, early-state publishers should start out with the simplest and largest platforms: Google Ads for web or AdMob for apps.

These platforms are designed for publishers who are new to advertising, meaning their setup is relatively simple and their management manageable. Follow their instructions closely, and don’t be afraid to ask for help if you’re not sure something is working in the way that it should.

How to Calculate Ad Revenue

Most tools and platforms you use to bring in ad revenue will give you an accurate figure for how much revenue you have earned through them over a given period of time. But what if you’re a multichannel publisher? What if you’re pulling multiple sources of demand from multiple tools?

The best way to calculate your ad revenue in that kind of situation, which is fairly common as publishers grow, is to rely on page view CPM as your primary metric.

So, instead of getting different CPMs from different places, you take your most recent revenue payout or several revenue payouts and divide that total revenue number by the total number of page views you got over the time period you are analyzing. Then, you multiply that by 1,000.

So, if you made $1,000 in ad revenue and had 100,000 page views over the same time period, your page view CPM would be $10.

How to Increase Your Ad Revenue

The thing about ad revenue is that it almost always can be higher — there’s no upper limit. And if you’re like almost every other publisher out there, you would like your ad revenue to be as high as possible at all times. These tried-and-true strategies should help with that.

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BUILD YOUR AUDIENCE

Growing your audience is always a good idea, and it’s one of the only ad revenue optimization strategies that works no matter what kinds of ad tech tools you’re using. If you’re doing digital advertising, a larger audience almost always means more ad revenue.

Obviously, creating great content that your audience wants is the number one way to do this, but there are other considerations. It might be worthwhile to invest in some promotional advertising or marketing of your own to get the word out about your website or app.

You might also take a look at your search engine optimization (SEO) efforts to find opportunities to increase the number of people finding your content through search engines, as well as stepping up your social media promotion game.

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IMPLEMENT DIRECT SALES

It is perfectly fine to operate on programmatic advertising only in the beginning of your ad revenue strategy, but as you grow and your reputation spreads, direct sales can be one of the most valuable ways to increase your revenue.

Direct-Sales_Higher-CPMS-HERO

That’s because brands will pay premium prices to reach exclusive audiences, and if your platform becomes recognizable enough and your audience impressive enough, you can start bringing in those direct dollars.

Of course, that will require either hiring and training a direct sales team or outsourcing one. For more information on the breakdown between hiring and outsourcing direct sales, check this out.

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FOCUS ON UX

While you’re thinking about building your audience to increase your ad revenue, don’t forget: A loyal user you already have is much more valuable than one you don’t already have. In other words, you have to make sure you’re keeping your current users to keep your ad revenue going in the right direction. And you do that, in part, by focusing on the user experience (UX).

A lot of things can affect UX on websites and apps, but it can get especially tricky when you start adding advertising into the mix. Some people just don’t like ads, and if they weren’t used to seeing ads on your site or app before, they may respond poorly when they do see them.

In our experience, the effect of reactions like that is usually minimal, but still, you need to consider ad frequency and placement. Are your ads too disruptive? You can find out in your analytics data. Take the time to understand when and where users are leaving your site or app. If it’s right after a big, bold popup ad blocks their view or a third video interrupts their video, maybe dial it back a bit.

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TRY NEW AD UNITS

In the beginning, most publishers do basic display and video ads. These have a low barrier to entry and are relatively easy to set up on your site. That’s great, and they can provide substantial revenue.

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But when you start trying to increase your ad revenue, you may find that other, more “premium” ad units might bring in those high-dollar buys you need. For example, Playwire publishers can run skinned pre-roll video units, in which the buyer’s brand is showcased on a “skin” surrounding a video player that will later play their video ad.

As an app publisher, you might find that rewarded video — in which users get an in-app reward such as another life or bonus item for watching a video ad — performs especially well and commands shockingly high CPMs.

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Not all ad units work for all publishers, but if you haven’t tried them, you don’t know. That’s why you need to try out several kinds of ad units to see which ones are the winning combination for your revenue situation.

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EXPERIMENT WITH DEMAND SOURCES

Relying on a single source of demand is never going to take you to maximum revenue. Some demand sources are broad and enormous, like Google, but other header bidders, ad exchanges, and networks can bring their own unique type of demand, expanding the number of buyers competing for your inventory.

And more competition for your inventory almost always translates to higher CPMs.

Web-Header-Bidding-Stack_Key-SSP-HERO

Really, there isn’t a limit on the number of demand sources you integrate with your header bidding setup. Just keep in mind that there is a technical lift involved for each integration, and more integrations means more opportunities for something to break. Still, increasing demand will almost invariably increase your ad revenue.

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TOGGLE PRICE FLOORS AND OTHER VARIABLES

When you’re dealing with programmatic advertising, there are hundreds of variables that can have an effect on your yield. Many publishers make the mistake of leaving these variables alone after they get their programmatic set up how they want it.

Revenue-Intelligence_RI

If you want to increase your ad revenue, you need to play around with all of the variables to make sure you’re not leaving revenue on the table. Toggle floor prices to see what they do to your yield and fill rates.

Create different audience segments in your data management platform (DMP). Experiment with ad frequency and even subscription options that allow dedicated users to have an ad-free experience.

Find what works best for your revenue, and do more of that. But never stop optimizing your revenue strategy.

Ad Revenue FAQs

It’s normal to have a ton of questions when you’re just entering the world of digital advertising as a publisher. The good news is that we have a ton of answers. Check out the ad revenue FAQs below.

Can Digital Advertising Be Combined with Other Monetization Models?

Absolutely. In some cases, this is a really smart move. Ad revenue is an important part of most publishers’ revenue strategies, but it can be combined with various other income streams. For example, you can offer a monthly or annual subscription fee to remove ads and access premium content. Alternatively, you might sell products or digital goods in your app or on your website, in addition to selling ad inventory to brands.

Does Ad Unit Type Affect Ad Revenue?

Definitely. While the breakdown isn’t always the same, you can generally assume that video ads will be more valuable than basic display banners. On top of that, premium ad units like skinned pre-roll video and rewarded video offer compelling metrics like 100% viewability that will convince buyers to pay top dollar.

How Can I Increase My Ad Revenue?

There is no maximum when it comes to ad revenue, so there’s always room to do better. Consider the strategies described above, or find a high-quality ad revenue amplification partner like Playwire.

How Much Money Can Apps Make Per Ad?

How much an app makes per ad is a fluid number that is influenced by a large number of variables. For example, the same exact ad run in the U.S. and run in China will make different amounts. Similarly, different kinds of ad units and app platforms (Android and iOS) will command different rates.

For reference, global in-app banner eCPM rates in 2021 fell somewhere between $0.16 and $0.38, while the global average eCPM for in-app rewarded video was between $12 and $14.

How Much Money Can Websites Make Per Ad?

As is the case with apps and other channels, websites make wildly different amounts of money per ad based on a huge number of factors. You actually control many of those factors by setting and changing the rules for your programmatic auctions.

However, if you want to get a basic idea of how much you could earn if you implemented ads, Google AdSense has a handy calculator that can give you a rough estimate. That comes with a caveat: The calculator gives an estimate for what you might make using Google AdSense, not other platforms, and it’s a very rough estimate.

Does Ad Unit Type Affect Ad Revenue?

There is no hard and fast rule for when to start running ads. Most beginner publishers are understandably eager to see some money coming in for all their hard work, but the amount you make from the tools that will accept you when you have a small audience will likely be negligible.

That’s why the recommendation for the early days is always to focus on building your audience rather than filling the site or app up with ads that almost no one will see. For websites, the general rule of thumb is that you won’t see much ROI until you start getting over 300,000 page views per month. For apps, you want at least 1,000 daily active users as a general rule.

Maximize Your Ad Revenue with Playwire

There are thousands and thousands of publishers, and many of them fail. And they fail for one key reason: They don’t bring in enough ad revenue to keep the lights on and the content coming.

That’s not you — at least, it doesn’t have to be. With the right strategies and killer content, you’re well on your way to bringing in revenue that can bring your website, app or other channel to new heights.

And when you’re ready to hit the next big phase, Playwire is here for you. We have taken publishers from stagnant revenue to soaring revenue time and time again. We do it with dedication, a deep understanding of ad tech and a healthy helping of innovation via our proprietary revenue amplification platform.

Interested in teaming up with a leading ad revenue partner? Contact Playwire. See if we’re a fit and what we can do for you. Our friendly and helpful team is ready to help.

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