Key Points

  • Ad revenue projections have turned into a tactic to win deals. Over-promising and under-delivering are par for the course in the industry.
  • Ad revenue projections are hard to make accurate because they depend on a host of factors.
  • Look for a provider that bases its business model on providing value to each publisher rather than one that is looking to achieve volume by onboarding as many publishers as possible.

It’s a Game with No Winners

Revenue estimates are a tactic frequently used by ad monetization platforms or tools in an effort to win business. Unfortunately, because the person providing that estimate is incentivized only by closing your business, they are rarely accurate.

Not only are they typically subjective, but they are also incredibly difficult to forecast accurately because they depend on so many competing factors. There are a host of factors on your side as the publisher, their side as the platform, and the ever-changing ways in which bidders are buying audiences.

So, in the end, this practice seems to turn estimated revenue into a battle of who can forecast the highest to win your initial business in hopes they'll work it out as time goes on.

And, very rarely, do these promises come true. It has led to a terrible practice in the industry of over-promising and under-delivering, which many publishers have experienced.

Case Study: A Real-Life Example

LEVVVEL _ The best gaming experiences start here. (1)

After receiving some pretty lofty promises from another monetization solution provider, the LEVVVEL team chose to leave Playwire and give another vendor a spin.

Immediately upon testing, earnings plummeted from the results they were getting with the RAMP Platform. LEVVVEL immediately returned to Playwire, but sacrificed a few months of higher revenue in the process.

“Ultimately, the competing vendor over-promised and under-delivered. Playwire was ready to pick up the slack.”

- Deni Latic, CEO Delati Group

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A Never-Ending Story

It’s a story we’ve heard from publisher after publisher, and the experience LEVVVEL had is far from unique.

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“It is so hard to find a reliable partner in this industry. It is filled with start-ups and plenty of people who will make false promises. Falling victim to such promises usually means sacrificing hundreds of thousands of dollars in revenue.”

- James Wray, Owner, Monsters and Critics

GIANT-FREAKIN-ROBOT (1)

“There is nobody else that can beat what Playwire does. There are plenty of solutions that will promise to do it, but none will deliver at their level.”

- Josh Tyler, Owner GIANT FREAKIN ROBOT

They are Usually Inaccurate

Ultimately, breaking down the factors that go into estimating your advertising revenue isn't a simple math equation that can be plugged into an ad revenue calculator, despite the fact that it feels like it should be. 

There are factors on your side (as the publisher) and factors of the platform (and the sources of demand they incorporate) that have serious interplay, making it tough to predict exactly what you'll make accurately.

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Factors on the Publisher Side

There are things you can control which will greatly affect your total ad revenue. A solid monetization partner should work with you to help maximize your strategy in addition to just trying to fill your ad units. This partnership will have a major impact on how much ad revenue you take home at the end of the day.

 

noun-demand-side-4368176-409AD7 Number of page views or daily active users: Depending on if you are monetizing a web or app property, there are different measures of traffic to pay attention to. When it comes to website ad revenue, your page views are the key metric (as it gives a good representation of repeat visitors, session lengths, etc.). For app publishers trying to increase their in-app revenue, your daily active users (DAUs) are the best measure of volume. The more of each metric, the better for your ad revenue.
noun_mobile advertising_1663802 Types of ad units: The types of ad units shown on the page have a huge impact on your final take home. Traditional display units don't drive nearly the same revenue as video ads or interactive units. A good partner will strategically work with you to incorporate higher-value ad units (like rewarded video) into your strategy, so the ad units you have today may not be a great measure of what your true potential revenue could be.
noun_Error_2801825 Number of ad units on page: In addition to the types of ad units, the number of them on each page as well as the ad placement also influences revenue. A good partner will help you walk a delicate line of just the right amount of ads on-page and in just the right location to increase revenue without sacrificing user experience (which will decrease page views and subsequently decrease revenue).
noun_update_3395501 Number of refreshes: The number of times an ad unit refreshes when in view also affects your top-line revenue. In the same way as the number of ad units on a page, the choice of the number of refreshes requires a balance between maximizing revenue and preserving user experience and page views.

Factors on the Platform Side

The platform providers themselves will also have a litany of factors that interplay with the factors just discussed on the publisher side.

 

CPMs

The most common factor to consider is the CPMs the platform is capable of providing to your website or app based on the demand sources incorporated. Even this is incredibly hard to accurately predict until you are in the system and running because CPMs are influenced by a ton of different factors, including:

 

noun_choosing_3096000 Your vertical: Different verticals have wildly different CPMs, and layer on to that the fact that your audience may span multiple verticals unrelated to your site content, and you have a web of different options for "average CPMs" to guess about.
noun_audience_3777133 Your audience: As bidders shift more and more to buying "audiences," your ability to generate higher CPMs from each visitor is highly dependent on if you have a Data Management Platform (DMP) and a wealth of data on your visitors to leverage.
noun-video-4681978-409AD7 Your ad units: As mentioned before, the types of ad units on your website can greatly affect your final take-home. Video units drive 5-6x higher CPMs, so trying to estimate what you should be getting from each type of ad unit, make the struggle to choose an appropriate average CPM even more complicated.
noun_sales_3971383 Direct deals: Direct deals drive somewhere in the neighborhood of 12x higher CPMs than traditional programmatic, and your eligibility for direct deals is based on quite a few additional factors. A partner that has a large direct sales team and a way to leverage your audience will certainly be able to get you access to these deals, but predicting how much you will earn for them in advance is nearly impossible.

 

RevShare

The revenue share a platform offers is also a huge factor in your ad revenue. However, most publishers make the mistake of looking at the RevShare percentage as the key number to evaluate.

Instead, consider the larger picture. If you are trying to maximize your total take-home revenue, that should be the metric you look at.

RevShares are all over the map, some firms will go sky-high (think 90%), but it's important to know what these RevShares are applied to. Would you rather have 90% of a grape or 70% of a watermelon?

In many cases, a smaller percentage of a much larger pie can still net you more pie at the end of the day, so make sure you don't get overly caught up on the RevShare percentage.

Find a Partner, not a Vendor

So if ad revenue estimates aren't a good way to compare ad monetization solutions, what should you do?

Look for a partner. Look for someone whose goal is to accelerate your business, not just line their pockets.

Volume vs. Value: You want to look for a provider that isn't looking for the volume play but instead focuses on the value play.

  • Volume: A platform that is focused on volume is simply looking to onboard as many publishers as possible. This business model is about getting as many publishers on the platform as they can with the least amount of effort expended to drive higher platform revenue.
  • Value: A platform that is focused on value is looking to maximize the revenue potential of each individual publisher onboarded onto the platform. This business model is about making sure each publisher is making as much revenue as possible to drive higher platform revenue.

Working with a partner that focuses on value drives both short and long-term gains in your ad revenue.

Case Study: A Real-Life Example

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Wrestling Headlines saw an immediate revenue uplift when joining Playwire. The additional revenue they earned along with the time savings from offloading ad management efforts allowed them to shift their business model.

This shift led to a massive increase in traffic, and resulted in further increases in revenue. Compounding the improvements to the business strategy, continued increases in page view CPMs have led to a very lucrative partnership.

“The immediate revenue increase from Playwire allowed me to pay my contributors very competitively and increase content production significantly. This change led to incredible growth in my business, which led to further increases in revenue."

- Calvin Martin, Founder, Wrestling Headlines

Amplify Your Ad Revenue with Playwire

Playwire is the value-driven partner you deserve.

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"For us, Playwire has been the reliable partner we’ve always wanted.”

- James Wray, Owner, Monsters and Critics


Speak with a member of our team today to find out for yourself.

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