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 current ad tech landscape.
  • Ad revenue estimates are hard to make accurate because they depend on a host of factors unique to each site and app.
  • Search for a partner 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 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 ad 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 when trying to calculate ad revenue or use a website ad revenue calculator.

Case Study: A Real-Life Example

LEVVVEL logo

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 compared to the results they were getting with the RAMP® Platform. Ultimately, LEVVVEL returned to Playwire, sacrificing a few months of higher ad revenue in the process, but gaining a better understanding of the difference selecting the right partner can make.

"Ultimately, the competing vendor over-promised and under-delivered. Playwire was ready to pick up the slack and help us maximize our overall ad revenue,” said Deni Latic, CEO of Delati Group.

Ad Revenue Resource Center

The Complete Ad Revenue Resource Center

A Never-Ending Story

It's a story we've heard from publisher after publisher; unfortunately, LEVVVEL’s experience is far from unique. Many publishers have struggled with how much ad revenue they can actually generate versus what's promised.

Spelling Bee Solver (1)

“I get marketing emails all the time from potential advertising partners, and most I just mark as spam, but something about your approach led me to get on a call [with Playwire] and I was just very impressed with everything,” said Creator and Owner of Spelling Bee Solver, William Shunn.

William continued, “Within the first month or so, I saw about a 20% increase in revenue, and by the time the holiday season was rolling around, the revenue was more like a 90% increase over the best month I had ever had with [my previous provider].”

Ad Revenue Estimates are Typically 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, even though it feels like it should be.

There are many 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 next to impossible to accurately predict exactly how much ad revenue you will make.

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Ad Revenue Guide

Read The Publishers' Guide to Ad Revenue

Factors on the Publisher Side

All this to say, there are things you can control that will greatly affect your total ad revenue. A strategic monetization partner will work with you to help maximize your strategy rather than simply just filling your ad inventory.

This partnership will have a major impact on your overall ad revenue at the end of the day so proceed with caution and choose the partner that fits your unique business needs.

  • Number of Page Views, Sessions, or Daily Active Users: Depending on whether 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 and page sessions are the key metrics, giving 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.
  • Types of Ad Units: The types of ad units shown on the page have a huge impact on your final take-home. Traditional banner ads don't drive nearly the same revenue as video ads or interactive premium ad units. A good partner will strategically work with you to incorporate higher-value ad units (like rewarded video ads) into your strategy, so the ad units you have today may not be a great measure of what your true potential ad income could be.
  • Number of Ad Units and Ad Layout: In addition to the ad unit types, the quantity on each page as well as the ad layout also greatly influence revenue. A strategic 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 could potentially lead to decreased page views and subsequently decreases in revenue.
  • Refresh Settings: 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, your refresh settings require a balance between maximizing revenue and preserving user experience.

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:

  • 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.
  • Your Target 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.
  • Your Ad Units: As mentioned before, the types of ad units on your website can greatly affect your final take-home. Video ads drive 5-6x higher CPMs, so trying to estimate what you should be getting from each type of ad unit, makes the struggle to choose an appropriate average CPM even more complicated.
  • Direct Ad Deals: Direct deals drive somewhere in the neighborhood of 12x higher CPMs than traditional programmatic advertising, 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 premium deals, but predicting how much ad revenue you will earn for them in advance is nearly impossible.

 

RevShare

The revenue share a platform offers also plays 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 ad revenue estimate, 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 when trying to calculate ad revenue or estimate your website ad revenue.

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

Volume vs. Value

You want to look for an ad tech provider that isn't just 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 focused on value is looking to maximize the revenue potential of each publisher onboarded onto the platform. This business model is about ensuring each publisher makes as much ad 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 and can help you better understand how ad revenue works.

Case Study: A Real-Life Example

letterboxd Case Study Image-1

Letterboxd came to Playwire wanting to scale its advertising efforts using a data-driven approach that maximized its ad inventory monetization. They also wanted to drive new premium demand without introducing additional operational costs or compromising user experience.

In partnering with Playwire, Letterboxd experienced a dramatic 490% increase in overall revenue across header bidding, direct deals, DMP-based targeting, and more. 

“We saw results immediately and have seen both premium demand and programmatic revenue from their killer combination of direct sales and full-stack revenue amplification,” said David Larkin, who leads Strategy and Business Development at Letterboxd.

Amplify Your Ad Revenue with Playwire

Playwire is the value-driven partner you deserve, helping publishers maximize their ad space and ad revenue generation through strategic and customized ad layouts.

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“The Playwire team is super responsive and supportive. They’re there to work with us, going back and forth, to make everything work. If I have any questions, I can always ask,” explains Dylan Tarre, Owner of Lambgoat.

Speak with a team member today to find out for yourself how Playwire can help boost your website ad revenue and overall advertising revenue.

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