The Publishers' Guide to Ad Revenue

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

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:

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.