Whether you are an ad publishing veteran or just starting to monetize your webpage, this guide to understanding and increasing ad revenue will help shed light on industry secrets that leading publishers use to boost overall yield and hit their ad revenue targets.
Publishers earn advertising revenue by publishing paid advertisements on their website(s), apps, or similar online platforms.
If you are running a successful online media property, monetizing your web pages with ads can create new and lucrative income streams.
As a consumer of online content, you know that most content providers rely on advertising revenue to pay for the content you enjoy. Conversely, advertisers rely on content providers to get their products, brands, and messages in front of qualified audiences.
In general, there are two ways for publishers to monetize their sites and build relationships with advertisers:
While direct buy publishing offers you more control and a more intimate relationship with your advertisers, it also requires more work. Many publishers in direct buy will end up hiring ad operations (Ad Ops) teams to manage the process of placing ads on the site and negotiating prices with advertisers. This reserves these kinds of deals for publishers capable of hiring a dedicated ad ops team or manually managing relationships on their own.
Because of this, and due to technological advancements that have made it more secure and efficient, programmatic advertising has grown in popularity over the last few years.
When ads are being sold programmatically, you’ll work through a Supply Side Platform (SSP) like Google Adsense, PubMatic, Xandr, Index Exchange, or Kargo. These networks take your available ad spaces and automatically auction them off to the highest bidder.
Programmatic advertising allows you to run ads with far less manual effort than direct buy, but in doing so, takes away some of your control and can also leave you open to malvertising and other problems that create poor user experiences.
In both cases, there are several different ad types you can make available, and they can vary depending on which device or platform your visitors are using, with each offering different benefits.
Here is a quick breakdown to familiarize you with each:
Through your SSP, you can choose banner sizes, shapes, and locations to make the best use of your space without disrupting the content - or the user experience - of your site.
In a direct buy situation, where you are working with the advertiser directly, the size, shape, and location of banner ads will have to be negotiated between you and the advertiser.
Banners ads are the most common form of advertising, making them easy to integrate into your site. Also, by making use of the white space on your page, and do not usually have rich media like audio and video, they are also the least intrusive to your browsing experience.
This way they will continue to be in front of the user as they browse, giving them high viewability metrics no matter where your user is on the page.
Video ads are often more engaging than static ads and will be more likely to earn a click, making them more profitable.
This is a very effective way of advertising that doesn’t disrupt a user’s browsing, and gets20-60% higher engagement rates than display banner ads. (Marketing Land)
Setting up ad revenue strategies for your social media can look a little different than what is found on your web pages because you are no longer working within the whitespace on your page. Instead, ads are found within individual posts:
To take the best advantage of this, find a good balance between the content your audience is there for and the ads necessary to support your content and revenue goals.
This is another form of native advertising that doesn’t interrupt content for your viewer.
Keep in mind that each social media platform has guidelines you must abide by to have a monetized account. Once you find which platforms will work best for you, familiarize yourself with their guidelines so you don’t lose your ability to run ads.
If your online platforms have enough traffic to begin accepting advertising, the next step is familiarizing yourself with common pricing models and how to calculate your ad revenue metrics.
Ad revenue is commonly referred to by publishers as “yield.” Put simply, yield is the total amount of revenue you earn from ads.
What is yield in advertising?
Yield is the total amount of revenue that a publisher earns from ads.
Most of the time, advertisers choose between a “Cost Per Click” (CPC) or a “Cost Per Mile” (CPM) model based on what they believe will be the most cost-effective or provide the best return on ad spend (ROAS) for them.
On the publisher end, it's important to understand these metrics so you know which ads are influencing your overall yield. This way, you can better strategize and boost your ad revenue.
Cost per click (CPC) is the amount an advertiser pays for each click their ad gets on your website.
CPC = Total Ad Cost/Total Number of Ad Clicks
If you are negotiating ad pricing using a CPC model, knowing your website's average click-through rate, or CTR, will help advertisers determine how much they’re willing to pay for an advertisement. A higher CTR allows you to charge more per click.
It is also a helpful metric when measuring how effective ads are on your website. For example, if you find one ad that has a lower CTR than normal, you might want to replace it with an alternative ad that resonates better with your audience.
Your click-through rate, or CTR, is expressed as a percentage and is the number of clicks an ad receives per impression (impression means that an ad has displayed on a user's screen, click or no click).
So an ad's CTR would be calculated as:
CTR = (Number of clicks/Total Impressions) x .01
Generally, the best way to maximize CTR is to ensure that the ads on your site are well matched to the interests of your audience. For example, if you have an automotive blog, having car ads on your website would be more effective than advertisements for home goods.
Cost per mille, or cost per 1,000, is slightly different from CPC in that advertisers pay a fixed amount for every 1,000 impressions their ad receives, whether it's clicked or not.
CPM is calculated as:
CPM = 1,000 * (Total Ad Cost / Total Number of Impressions)
When using a CPM model, you will want to focus on the viewability of your ads. For example, placing all of your ads on the bottom of your webpage (where few readers actually end up) may keep ads out of your content, but will earn you little to no impressions.
Space out your ads to keep your content clean, but make sure to still place them in high traffic areas.
When publishing ads, it may be possible to have one advertiser running a CPC model, while another runs a CPM. This can make it difficult to compare performance.
You can easily get around this by converting your CPC metrics into CPM. This will help you to understand the average revenue you are receiving across either model.
To do this, simply take your most recent ad revenue payout, divide by the number of impressions you received over the same period, and then multiply that by 1,000.
This is what is called an eCPM, or effective cost per mille (1,000).
eCPM = (Ad Revenue/Impressions) x 1,000
So, let's say you earned $5,000 in ad revenue over a period in which the ads on your site received 500,000 impressions. You would calculate eCPM as:
eCPM = (5,000/500,000) x 1,000
Your average cost across each of the ads you are publishing is then $10 for every 1,000 impressions.
While eCPM will tell you your average cost per 1,000 impressions, there are a couple of other metrics that you will need to consider to have a full understanding of your ad revenue performance.
As a publisher, your most basic website performance KPIs are closely tied to your ad revenue. In general, more traffic means more impressions and revenue. But it is also possible to increase site traffic without increasing session lengths. If this happens, it means your ad revenue still has an opportunity to grow by focusing on increasing the amount of time visitors spend on your site.
High bounce rates generally indicate that users don’t find your content valuable, or are struggling to engage with it. Reducing bounce rates will increase your yield by allowing you to serve more ads per user.
Putting the right ads in front of your audience is often more effective (and quicker and easier) than boosting site traffic, but this requires you to keep track of your audience’s interests and desires.
This metric will show you, on average, how each customer is contributing to your ad revenue.
Revenue Per Visitor = Total monthly ad revenue / # of monthly unique visitors
It’s possible to increase your number of visitors without increasing your total monthly revenue. When this happens, it will lower your average revenue per visitor.
It means that even though you are attracting a larger audience, your content is failing to keep them on your webpage.
By contrast, increasing your ad revenue while maintaining the same number of unique visitors means you are creating more engaging content while maintaining the same number of users, thereby increasing your overall revenue.
If you find you have healthy site traffic but are struggling to keep users on your webpage, it likely means you are publishing content on the right topics, but struggling to keep your users engaged.
This could be because of the quality of your content, but also could be the quality of your advertisements and user experience.
Make sure you are exploring the front end of your website as well as experimenting with different kinds of content to create an experience your users want to engage with more deeply.
Calculating revenue per page will show you which web pages are performing better than others, giving you insight into what kind of content your audience is enjoying the most.
You can easily do this by pulling page performance data from your website analytics software.
You can calculate revenue per page by taking the total revenue from ads across your site and multiplying it by the percent of total views a given page acquired in the same time frame.
After doing this, consider why some pages are bringing in more revenue than others. Look for patterns. Is there a specific topic or form of content your audience seems more drawn to?
Gaining a stronger understanding of your audience’s interests will allow you to improve visitor engagement, which will ultimately produce stronger advertising performance metrics and increase overall yield.
This metric looks similar to revenue per page, but instead of breaking down your site traffic into your different pages, you break it down by the user demographics your analytics software provides you (for example, mobile versus desktop users, or users in specific geographic locations).
Once you have your numbers, you can see how different demographics are affecting your revenue.
It may be possible that one group brings more traffic than others, but fails to engage as much.
How can you get these users to engage more with your content and how do you reach more users that are already highly engaged?
Understanding who these users are will lend better insights into what their interests may be, and will allow you to create better content for them to engage with, keeping them on your page and boosting your ad impressions.
This metric can easily be found in Google Analytics or similar software and will tell you how many pages a user visits before leaving your site.
By breaking users down into their appropriate demographic segments, you can see which ones tend to stick around and which ones are most likely to leave.
You will also learn which pages tend to influence users to continue browsing, and which ones fail to do so.
This way, you can narrow your focus on users who enjoy your content, while also learning what kind of content to create.
Keep in mind that page views and bounce rates don’t report on the way the user engages with the content on your site. Just because a page has a high bounce rate, doesn’t mean it isn't providing value to users. It could be that your content is answering their questions and they don’t feel the need to continue browsing.
Because bounce rates and page views can be skewed by one-stop users, tracking users' time on page is another effective way to discover how engaging your content is.
This way, you can track user engagement on a single webpage even if users don’t continue browsing on your site.
Time on page is also a superior metric compared to session length (which measures a user's time across your whole site) because it informs you which content on your site is the most and least effective in engaging your audience.
But keep in mind that most analytics do not pause the timer when a user navigates away from the page for another tab, and Google Analytics won’t track the last page visit or a visit that is an immediate bounce.
If you are using Google Tag Manager, you can follow these steps to set up a scroll-depth tracker to help you understand just how far down users get on your content before leaving the web page.
Many publishers fail to keep their eyes on their front-end experience, leaving some issues to go unnoticed.
Leave a feedback form open on your site, and search through your social media comments for responses from your users.
Make sure you not only have opportunities for your users to give you feedback but that you actually listen to that feedback and even take up the role of a frontend user from time to time by visiting your site and consuming content the way a visitor would.
This way, when rare and difficult-to-spot interruptions happen they don’t go unnoticed and unresolved.
The next step will be to prep your website for monetization. This means providing an experience that simultaneously satisfies both your audience and your revenue goals.
Running a website that doesn’t meet users’ expectations of speed and reliability will end up costing you in the long run.
A two-second delay in page speed can increase bounce rates by 103%. But not only will it negatively affect your bounce rates and session lengths, but your search engine rankings will also suffer as well.
This means if your site is trailing behind competitors, or not staying within what Google considers to be the maximum accepted load time (2-3 seconds), your site will be penalized and your discoverability will suffer.
Your site will then be losing revenue on two fronts. Because site traffic is closely tied to ad yield, taking hits to your SEO will directly impact revenue, while the high bounce rates from the users that do find your site will only exacerbate the problem.
Filling your page wall to wall with ads may seem like an effective way to rake in ad revenue. But in reality, this is more likely to hurt you than help you.
Optimizing the number of ads your audience is served is important to healthy ad revenue, but site retention and customer loyalty are far more effective ways of achieving this.
Blasting visitors with ads is more likely to push them away from your site, and may even lead them to install an ad-blocker. Once that trust is broken, it may be difficult to win back.
Running too many ads on your page may also lead advertisers to start devaluing your website.
If your website has only two ad slots, advertisers only have two chances per session to get their ads in front of a user. With the right audience, they might pay a premium to grab one of those two places.
But if you are running 400 ads per session, the likelihood of a single advertiser’s ad being seen diminishes and they will inevitably pay less to advertise on your site.
Take the time to create a tolerable ad experience that keeps users coming back and maintains the value of your brand and ad space.
The correct size, amount, and placement of ads are going to vary from website to website. But ideally, you want all three to complement your content and user experience.
You can experiment with different placements and sizes across your site and see which ones perform the best, but generally, these are the best ad placements and sizes for different kinds of devices:
The general size and construction of desktop sites and browsers leave a considerable amount of white space that can be used to monetize your site. This whitespace is usually there to help space out the content in the main area of your site, as well as in the areas like your header/footer and sidebar.
But you also accomplish this by placing advertisements in these areas, spacing out your content while also monetizing your site.
The 728x90 banner fits into the header of your content and is often the first thing users see when visiting your site. Because of this, ads place here earn high viewability and CTR, making them profitable for both you and the advertiser.
This 300x250 ad fits perfectly into the sidebar content of your web pages and maintains viewability without disrupting the main content on your site.
Similar to the 300x250 as the 300x600 ad stays with the sidebar content on your site. But in this case, the ad takes over the entire sidebar, increasing viewability. While it can limit your ability to create sidebar content, the main content on your page remains uninterrupted.
Mobile ads often look different than desktop ones because of the way the device adjusts for the smaller screen. Webpages will often lose sidebars and other elements to create a more streamlined experience.
This means you need to put ads in-between content, to catch users’ attention as they are scrolling through your page. Ideally, this works the best by placing the ad right before the fold so that your user naturally comes across it as they read.
Now that you have your website optimized and publishing ads, you’ll want to learn the best ways to squeeze out as much revenue as possible.
Here are some tips to get you started:
Digital advertising has an ebb and flow, and you should become familiar with it so that you can utilize it to your advantage.
The figure above shows how CPM rates change month to month over the course of a year. Q1 and Q2 typically see significant drops in CPM rates that begin to pick up during Q3 and then take off during Q4.
Take the time during the lulls to think about your advertising budget and strategy. Experiment with something new, and see how it performs during Q3. If you’re keeping a close eye on your audience, you’ll notice how their behaviors and interests change and having an ad campaign ready to reflect that in Q4 will be crucial to your overall yield.
Along with this, CPM rates tend to drop at the beginning of each month and slightly rise towards the end.
This means you will benefit from lowering and raising your prices in response to these shifts.
Like we mentioned before, the advertising on your website should go hand-in-hand with the kind of content you produce.
Keeping track of your most successful content and advertisements will help you narrow down what your audience’s interests are.
By better tailoring your ads, which you can do with many of the settings on the platforms you pull ads from, you will increase CTRs and your overall payout.
Along with this, advertisers will often pay a premium to publish ads on sites that share the same target audience, so don't be afraid to share your data with them.
Having a robust data collection strategy, whether through your CRM platform, Google Analytics, or third-party cookies, doesn't just give you insights on what kind of ads to serve.
It can also be used to leverage higher CPMs or CPCs for companies looking to target the user demographics coming to your site.
This will become more difficult once third-party cookies are inevitably deprecated, but for the time being, you can use this information to your advantage.
It would also be wise to start building your own database of customer behavior and interest so that once third-party tracking is no longer possible, so you can still have something to show advertisers when negotiating price.
This will give you insight into which kinds of placements, sizes, and advertisers are performing on your site.
As your publishing business grows, you will want to have a firm understanding of which ads work and which don’t. This means constantly trying new strategies and testing them against your current approach.
This will also allow you to see which ad placements produce the best results, allowing you to charge a premium for those placements.
This file details exactly which partners you have provided you with demand (from SSPs to DSPs). It's a way of controlling the demand coming into your ad units and keeping it as fitting to your audience as possible (as well as avoiding platforms known for delivering poor-quality creatives).
Online ad publishing standards and practices are always in constant motion. Being able to squeeze as much revenue out of your ads as possible will require you to stay on top of a constantly changing ecosystem.
The ease of programmatic, along with its improvements thanks to new technologies, has led to it being the preferred method of monetization for most publishers.
Programmatic advertising is expected to account for 86.5% of all digital ad spend in 2021, according to eMarketer, a 1% rise from 2020, but a 25% increase in total dollars spent.
This growth is expected to be driven by social media, video (thanks to 5G connectivity), and mobile devices, which have all seen significant—and likely permanent—spikes due to the pandemic.
Mobile has slowly taken over online advertising, and In 2020, mobile device usage increased by 93 million unique users, while time per session increased by 20%.
So it should be no surprise that this year mobile ad spend is expected to reach $156.38 billion, or 40% of total ad spend worldwide.
Having your site set up to display not only desktop but also mobile-friendly content will continue to be one of the most lucrative aspects of your publishing strategy.
Video has long been the dominant form of online advertising, and streaming sites like YouTube and Hulu generate roughly 10 billion in advertising revenue a year.
But there is a new format on the rise as well.
Connected TV (CTV) devices like Amazon Fire TV and Roku are expected to become major battlegrounds for advertisers and publishers. Roughly 67% of homes with WiFi have subscriptions to streaming services like Amazon Video and Netflix, and ads served over these kinds of services and devices yield extremely high completion rates, around 98% in fact.
While the market share of CTV/OTT (over-the-top) ads isn’t changing much, 60% of advertisers that do use the platforms are expected to have increased their investments in 2021, thereby increasing the value of these kinds of ads in their overall media plan.
Not only this, but an Outbrain survey found the click-to-play video to be the preferred ad format, with 97% of survey respondents saying they prefer this ad type, which also results in a 7% increase in purchase intent over traditional ads.
Spending on native ads, which can get a 20 to 60% higher engagement rate than standard banners ads, is expected to increase in the US by 21% in 2021 to a value of $57B (Outbrain).
These engagement rates, plus the fact that native ads will still reach users with ad blockers installed, make native ads one of the most lucrative ways to engage users and boost your ad revenue.
But be wary, these kinds of ads have a reputation for clickbaity titles and fraudulent tactics, something that can quickly turn off users.
While slightly delayed, the end of cookies and third-party data tracking is still on the way. This means advertisers and publishers are going to have to discover a way to collect data and track users on their own.
Contextual advertising is likely to see a resurgence, so tracking your site metrics and understanding your audience will become more important than ever.
And while programmatic advertising has been on the rise over the last few years, the end of third-party tracking is likely to stunt this growth as advertisers are forced to return to direct buy opportunities to properly target customers.
Several publishing groups are working to build their own tracking methods, like CafeMedia’s four steps, as well as many open-source identity tracking solutions like ID5’s Universal ID, but the full effects of this drastic shift in the digital advertising industry are yet to be seen.
Preparing and building first-party data on your users will be vital to your success once cookies disappear, and so will keeping your ear to the ground and staying up to date with new and growing industry solutions.
There are plenty of roadblocks when it comes to monetizing your website with ads, including the following.
Others have predicted that these extensions will have cost the ad publishing industry $35 billion in revenue in 2020 alone.
Users consistently rank slow page load times, intrusive ads, and website browsing manageability as their top reasons for installing ad blockers, meaning that the quality of your content and user experience is crucial to maintaining viewability and maximizing ad revenue.
Setting up pop-ups to ask users to turn off ad blockers on your site can be an effective strategy, but only after you have considered :
Offering users an ad “lite” option can also help alleviate their anxieties about irritating advertisements while still allowing you to bring in some revenue.
Another option is asking users to subscribe, through regular payments, to remove ads from their browsing experience, but usually, only the most loyal users will select this option.
As a reminder, these kinds of pop-ups and programs may lead users to turn somewhere else for their content.
The best approach then is to create content users can’t find anywhere else and remind them that revenue from ads is what makes it possible. This way they can feel they are supporting the content they love by turning off their ad-blocker.
Page load speed is one of the most crucial factors in maintaining ser experience.
In fact, studies have shown that 40% of users will abandon a webpage that takes more than three seconds to load.
Things you need to consider to optimize page load speeds include:
As mentioned before, slow page loads times will leave a bad impression on both users and search engines.
Google penalizes sites with poor loading times, causing you to lose users on two fronts. Not only will your content be less discoverable, but the sessions that do appear on your site will be cut off by frustrating load times.
Heavy ads are digital advertisements that use up enough of your website’s resources to significantly slow down page load times.
Google defines heavy ads as any ad that meets any of the following criteria:
A site’s “main thread” is responsible for its basic, step-by-step functioning.
By limiting the file size of an ad, you free up resources from the main thread, creating faster page load times and better responsiveness.
Video stuffing is when an advertiser runs video ads on your content that fire additional invisible video advertisements in the background that are never viewed by the user.
Video stuffing is considered a form of malvertising, and in this kind of attack, the bad actor is filling your webpage with unseen video advertisements to increase ad impressions and revenue.
This kind of unscrupulous advertising can lead to:
The bottom line is that your user experience is the key to maximizing ad yield. Keeping your site clean and free of frustrating and fraudulent interruptions will not only maintain a pleasing user experience but will also boost your user engagement metrics and ad revenue.
Similar to video stuffing, ad stacking is when advertising fraudsters hide invisible ads behind other static ad units.
When this occurs, your webpage may be loading dozens upon dozens of ads that are not visible to your user.
While you might see a small increase in advertising revenue from these bolstered ads in the short term, over time you will see an increase in drop-off rates due to poor user experience.
This is because the hidden number of ads will use up your site resources and drag down your page load speed.
Trustworthy ad networks, DSPs, SSPs, and monetization groups will all have their own ways of screening and approving ads to keep your site protected from malvertising.
But sophisticated bad guys will find their way around this.
Ad cloaking is one example of a technique that malvertisers use to evade detection and occurs when a malicious advertisement is disguised as a harmless one to pass through standard security checks, only to reveal its true nature once it is on your webpage.
This leaves your webpage vulnerable to:
These kinds of ad attacks can be tricky to find, but unexplained drops in your metrics can be the first clue that malvertisers are targeting you.
If you are looking to get ahead of malvertising attacks, make sure you take the time to explore the front end of your webpage for any malicious ads. This way you can catch fraudsters before they impact your user experience or your ad revenue.
More importantly, make sure you are partnering with reliable ad networks and SSPs.
If you start experiencing drop-offs in your metrics, try turning certain SSPs off and on to isolate the issue. Once you discover the culprit, you can take steps to address the issue.
But while blocking fraudsters is an effective preventive measure, it is far from a final solution. Sophisticated malvertisers know how to work their way around these features, and will continue to attack your site.
Many publishers turn to ad security experts to help track down malicious groups, but you often end up playing a game of whack-a-mole. Knock one fraudster out, and another appears shortly after.
At cleanAD, our software removes the need for blocklisting by uniquely detecting malicious behavior at runtime, blocking harmful activity while still allowing ad impressions to fire, meaning fraudsters still pay you for ad impressions even though their malicious ad is being blocked on your site.If you are experiencing problems with malvertising, you can sign up for a cleanAD free trial here.
Opening your website up for paid advertisements comes with both opportunities and challenges. But the most important part of maximizing your ad revenue will always be your user experience.
Keep your content and advertisements focused on your users’ interests, maintain fast page load times, make sure you are partnering with trustworthy ad networks and suppliers and put in place appropriate defenses to protect your site from malvertising.
This way you can build customer loyalty, sell premium ads, and prevent wasted time spent dealing with user complaints and chasing down malicious advertisers.