Advertising revenue refers to the income you earn from placing ads on your website or driving social traffic to an ad campaign. Businesses pay website publishers to display ads to their audience, and publishers can earn significant revenue this way. This article will answer the question, “What is ad revenue?” and explain how to profit from it.
What is advertising revenue?
It is the income you earn from placing ads for external products and services on your website. For example, you run a popular news site in the iGaming niche. Many gamers visit your site to catch up with the latest industry events. iGaming platforms observe your website’s high traffic and begin advertising their services to your audience. This is a fitting illustration of earning ad revenue from your website traffic.
Advertisements are the most common way for website owners and developers to monetize their content. Publishers can use different types of ads, including Banners, Native Ads, Direct Link, Interstitials, etc.
Online advertising spending is expected to grow from $740 billion in 2024 to nearly $1 trillion by 2028. This rapid growth provides ample opportunity for publishers to increase their ad revenue.
Source: Statista
How does ad revenue work?
Advertisers usually pay based on three models:
- Cost-per-click (CPC): An agreed payment each time someone clicks on the ad.
- Cost-per-mille (CPM): An agreed payment for every thousand impressions (views). A low CPM means you’ll make less money from ads.
- Cost-per-action (CPA): An agreed payment for every action you drive for the advertiser. The action could be a trial, app install, subscription, survey fill-out, etc.
Your website ads revenue depends on many factors, including the target audience, geographic location, ad type, and niche. If your traffic comes primarily from countries with strong economies (USA, UK, Germany, etc.), you’ll make more money than websites whose traffic is mainly from countries with weaker economies.
Some ad formats for publishers pay more than others. For example, brands pay more for Interstitial ads that cover the whole screen.
Similarly, some niches and target audiences are more valuable than others. If your website specializes in financial services, technology, e-commerce, iGaming, etc., you’ll likely get more site advertising revenue than other niches.
As a website publisher, you should aim to optimize your CPM. You can see our tips to increase CPM if you need help.
To Contents ↑How do publishers generate ad revenue?
You can generate ad revenue via two main options:
- Signing up for an ad network.
- Pitching advertisers directly.
The first option is the easiest because the network already has a collection of advertisers you can work with. You only need to sign up and get accepted into the network.
On the other hand, pitching to advertisers takes a lot of work. You need to constantly discuss and negotiate with potential advertisers, which can be stressful and eat into the time needed to produce content.
Adsterra is a first-rate ad network with 15,000+ high-quality advertisers seeking publishers to work with. Join and monetize your site.
To Contents ↑Calculating advertising revenue
Calculating your ad revenue requires taking into account several factors, mainly click-through rate (CTR), cost per click (CPC), and effective cost per mile (eCPM).
- CTR: You calculate CTR by dividing the number of ad clicks by the number of views and multiplying it by 100 to express it as a percentage.
- CPC: The cost advertisers agree to pay for each click you send to their advertisement.
- eCPM: This metric refers to how much you generate on average from 1,000 impressions.
- Ad revenue: Multiple your eCPM by the number of impressions and divide by 1,000 to get your total ad revenue.
Your ad revenue formula is Number of Impressions × eCPM / 1000. For instance, if you display an ad 100,000 times and your eCPM is $7, total ad revenue is (7×100,000) divided by 1,000, giving $700.
Benefits and disadvantages of earning ad revenue
Let’s examine the advantages and disadvantages of using ads to make money from a website:
Benefits
- Simplicity: Advertising is the simplest method to earn money from your website. Ad networks already handle the process of courting advertisers. You just need to sign up and tap into the existing ad inventory.
- Scalability: You don’t need massive traffic to earn money from ads. You can start with small traffic and grow your revenue as your traffic grows.
- Attracts consumers: The alternative to ads is charging money for your website content, which can scare off consumers, especially for new sites that haven’t built a reputation. Advertisements enable you to offer content for free and attract visitors to your website.
Disadvantages
- Volatility: Ad revenue fluctuates with your website traffic. You can lose significant money if you experience a temporary traffic slowdown.
- Strict rules: Some ad networks have strict rules concerning the type of advertisers they can work with. You’ll have to comply to get approved for such networks.
- Less control: Publishers can filter unwanted ad types but can’t select only one type of offer, like in affiliate marketing. You have less control over the ads that appear on your site.
How to maximize advertising revenue
Below are some tips to help you maximize website revenue:
- Create high-quality content: Your website content should offer great value, answering vital questions and providing factual information. It should be credible, readable, and easy to follow. High-quality content translates to more visitors, which brings in higher ad revenue.
- Choose a relevant niche: Online earnings may come faster if you pick a niche whose topics are always in demand: Entertainment, News, Music, Technology, Finance, and Sports. To get a good idea, you can check which blog niches are the highest earners on your ad network.
- Experiment with ad formats: Depending on a single ad format is risky. You can try combining ads with different mechanics or layouts, e.g., Popunders and Social Bar.
Adsterra connects your audience with ads in various formats, including In-Page Push, Direct Links, Banners, Native Ads, and Popunders. You can cash in on various ad offers that will reward your content creation effort.
To Contents ↑FAQs
Ad-blocking software can significantly reduce your revenue. To counter this problem, you can choose an ad network that uses anti-ad blocking tools, allowing you to claim revenue you would otherwise have lost. You can also use native ads incorporated into your website’s content to bypass ad blockers.
Seasonal trends affect ad revenue significantly. Website publishers usually earn more money during festive seasons when people are compelled to buy more items. For example, expect to earn more during Black Friday and Christmas than in non-festive periods. Webmasters owning streaming platforms, sports blogs, or movie sites usually cash in on big sporting events.
Yes, you can predict ad revenue earnings based on previous earnings data. Predictions are not always accurate, but they help publishers estimate revenue and make business plans in advance.
Adsterra’s Statistics for publishers provides real-time ad earnings metrics. You can always monitor how much you’ve earned from ads over a certain period, helping you predict what you’ll make in the future.
Yes, diverse ad formats can increase your advertising revenue. Some ad formats work better on different audience segments than others. Hence, using multiple ad formats means getting maximum revenue from all your audience segments.
Yes, you can generate ad revenue from other ways, such as a social media account and YouTube channel. With a popular social media page or YouTube channel, you can advertise for external brands and make money just as it works with a website.
Below is a case study of a YouTube content creator who earned hundreds of dollars weekly monetizing their videos with Direct Links.
Conclusion
We’ve explained what you need to know about ad revenue: how it works, its pros and cons, and tips for maximizing revenue. Above all considerations, the key to making money with ads is choosing the right ad network. You need a reliable network that delivers relevant ads to your audience. Luckily, Adsterra fits this profile perfectly. We deliver high-paying ads across different niches and in various creative formats. Sign up today and get approved in as little as 10 minutes.
