The Publishers' Guide to Ad Revenue

Built with the expertise of:

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

Ad revenue can refer to money made from advertisements across all kinds of media, including physical media like newspapers and billboards. But let’s get real – 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:

If you’ve read this far, you’re probably convinced that ad revenue is a critical part of any digital monetization strategy. So, where do you start?

BALANCE YOUR AD REVENUE GOALS AND RESOURCES

So, are you ready to dive into digital advertising?

If you just got your site live a couple of weeks ago, you’re in a very different position from website owners 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 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 earned revenue.
• Grow your 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 earn revenue. What tools are going to make sense to help manage your earned 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 views 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.

CHOOSE AN AD PLATFORM

When you're ready to start bringing in money through advertising, 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 enterprise-level publishers. But don’t fret! Find out more about if you’re a fit for Playwire here, and if not, what steps you can take to get there.

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

These platforms, controlled by Alphabet Inc., dominate the U.S. online advertising market. 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.

Most tools and platforms you use will accurately show you how much revenue you have earned over a given period. 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 ad revenue in that case, 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 ad revenue number by the total number of page views you got over the period you are analyzing. Then, you multiply that by 1,000.

Putting it into action, if you made $1,000 from ads and had 100,000 page views over the same period, your page view CPM would be $10.

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.

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.

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 step up your social media promotion game.

IMPLEMENT DIRECT SALES

It is perfectly fine to operate on programmatic advertising only at 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.

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 of building vs. outsourcing direct sales, check this out.

FOCUS ON User Experience

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.

TRY NEW AD UNITS

In the beginning, most publishers run 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.

But when you’re ready 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 a number of high-impact units, exclusive to Playwire, such as 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 ads — in which users get an in-app reward such as another life or bonus item for watching a video ad — perform especially well and command shockingly high CPMs.

Not all ad units work for all publishers, but if you haven't tried them, you don't know. That's why we always recommend testing several ad unit types to see which ones are the winning combination for your business.

EXPERIMENT WITH DEMAND SOURCES

Relying on a single source of demand is never going to take you to maximum revenue, but neither is incorporating tons of sources that ultimately drag down your site with poor-quality ads. 

Some demand sources are broad and enormous, like Google's advertising system, but other header bidders, ad exchanges, and networks can bring their unique type of demand, expanding the number of buyers competing for your inventory.

While there isn't a technical limit on the number of demand sources you can integrate with your header bidding setup, it's crucial to strike a balance between quality and quantity.

Here are some important considerations to keep in mind:

• Technical Lift: Each bidder integration requires technical resources, maintenance, and constant management.
• Complexity: More integrations mean more potential points of failure. 
• Diminishing Returns: There's a tipping point where adding more sources for the sake of adding sources will not provide value, but may actually hurt your revenue long-term. Remember, quality over quantity is the name of the game.
• Quality Control: Too many resellers or low-quality demand sources can hurt the value of your inventory.

The key is to strategically select demand sources that complement each other and align with your audience and content. Monitor performance closely and be prepared to optimize your demand stack regularly. 

Remember, when it comes to adding demand sources, it's not just about quantity – the quality and relevance of your demand sources are equally, if not more important. 

Learn more about how to more effectively incorporate demand sources by clicking here.

TOGGLE PRICE FLOORS AND OTHER VARIABLES

When you're dealing with programmatic advertising, thousands of variables can affect your yield. Many publishers make the mistake of leaving these variables alone after they get their programmatic set up how they want it.

If you want to increase your ad revenue, you need to constantly manage and adjust all of these settings and variables to ensure you're not leaving revenue on the table. Toggling floor prices to see what they do to your yield and fill rates is one of the most important.

You also need to focus on your data settings and solutions, such as creating different audience segments in your data management platform (DMP), and experimenting with ad frequency and even subscription options that allow dedicated users to have an ad-free experience.

And truthfully, this is just the beginning. You can never really stop optimizing your revenue strategy. The digital advertising landscape is constantly evolving, with new platforms emerging, and staying ahead of these changes is crucial for maximizing your ad revenue.

It takes time to find what works best for your revenue, but once you do, the simple of it is, do more of that.

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 monetization 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 across a wide range of verticals and platforms from stagnant revenue to soaring ad revenue time and time again. We do it with a deep understanding of ad tech and a healthy helping of innovative solutions via our proprietary RAMP^® – Revenue Amplification Management Platform.

Interested in teaming up with one of the leading ad revenue partners available on the market? Contact Playwire to find out if we’re the right fit, and what we can do for you.