Over the past decade, I've build a consulting practice around helping digital business owners solve these problems, for everything ranging from website acquisitions to turnaround situationa and growth planning. This article captures some of the core concepts I apply to improve website revenue. We'll share a bit about who is buying your ad inventory, what they are looking for, and most importantly: what are they willing to pay for? Let's starts with the attitude you take towards website monetization to make this successful.
If you want to increase your website's ad revenue, you need to look at like a business. You're building an audience for advertisers. Your earnings are based on the value you bring to the process. Is the audience relevant? Can the ads be seen? Is there brand safety? And, ultimately, can advertisers close business?Balancing service to your users vs. advertisers is crucial. With that in mind, here's how to look at the different types of advertisers, what they bring to the table, and what they will ask of you in return....
The Brand Buyer: If we were in Vegas, these are the high rollers. They pull up to the carport in a comped limousine and say "dahling" a lot. With huge budgets and a corporate mandate to blow it all to build brand awareness, they are a flowing river of cash. Brand buyers will eyeballs today in hopes of future business. Look at all the ERP and consulting advertising spattered all over airports. Cash, thrown to the winds in hopes of someday scoring a call from a passing CIO or VP. The call with a multi-million dollar customer at stake. Brand buyers in action.
Of course, there's also the old saying that "He who has the gold, makes the rules". And rules you will get with this bunch. Strict restrictions on the number of ads per page. Placement limits. Content policies: family friendly and don't hit any controversial topics please. They want their message on websites that are prominent and respectable.
In reality, these guys are all afraid of their boss. They are spending a pile of money with no clear short term results. Thus the fixation on brand safety and policies: they have no other way to show value. A direct response buyer can at least point at the pile of leads their bold moves generated for the company.
If you're taking the "high road" in content quality and traffic building, brand buyers are your best bet.
Re-targeters: Continuing our Vegas example, we have the re-targeter. This next level of advertiser is using personalized data to chase a prospect around the web. These guys are the cool math types with a careful eye on the numbers. They've got a bunch of lists and are using your site to "ping" their target customer on a regular basis. One risk: the growing threat of privacy regulation.
From a publisher perspective, I've always liked these folks. While they have some rules, they also have some perspective on how long it is going to take to close business. Unless you promote affiliate offers, they'll beat anyone else's bid for the ad spot. At the customer level (everything is at the customer level with these guys). They use relatively audience friendly messaging. They rarely using hard-sell tactics, aiming to gently get seen and herd leads towards a sale.
Contextual Advertisers: These folks target offers using cues from your content or traffic. Sometimes it works.... sometimes it doesn't. Targeting varies by site. Smarter firms target based on demographics, using your audience to find relevant offers. Lower tech approaches are pretty much keyword matching.
One key feature of contextual buyers: they don't expect to talk to prospects again. This reduces demand and changes behaviors. Brand buyers want the opportunity to slowly close a sale with follow-up deals. The rest of the world, realizing they have one shot, attempts to close harder with aggressive ads. Keep a close eye on this traffic to ensure they're not annoying your audience.
Shouters: So what do you do when you don't have personalized data and can't use other cues to find an offer? Why you SHOUT of course. Very, very loudly. Pound the table with aggressive imagery, browser traps, click-bait and other tricks. And those banners that look a Window's download button. A certain fraction of the traffic will convert anyway.
That being said, I have a soft spot for the shouters. They're trying to squeeze blood out of a stone, after all civilized methods have failed. Without them the lower tier of the web wouldn't have a viable monetization strategy. God bless them, each and every one.
Just be sure your audience strategy is "churn and burn" than "nurture trust" if you're using this stuff on your site. It works, but at a significant cost of user trust and engagement.
So...who should you talk to? We've profiled a few suggestions for each level of the market.
Ad Exchange / Premium Inventory: The big boy table for buying and selling display ads. It has a high level of competition and pays the best rates. Large brands use this market for high dollar buys on sites they are confident are brand-safe. Generally requires high volume (20MM+ pageviews / month) to get an invitation. Smaller sites can get access via platforms like Ezoic (simple version of Ad Exchange).
Major Display Networks: Google AdSense is the market leader in this space. They provide brands and merchants with an affordable way to run ads on smaller websites. If you can get approved for AdSense, use them. Google AdSense has strong set of standards around website content and advertising placement. You can often boost your revenue by running other networks: here are a few well regarded options:
Other Display Networks: Brand interest drops fast as you move away from the major ad networks. The buyers shift to "direct response advertising". These are more aggressive formats intended to push a customer through to a sale. These ads pay less - but have looser standards, opening up this demand to a larger set of websites. A few options to check out:
Check out our best practices for ad optimization for ways to increase your earnings.
The website revenue calculator blends three different pieces into a single tool. The first part is a simple ad revenue calculator (visitors x pages x advertising rates). The second part was harder and uses data from a sample of 100+ small websites to estimate revenue. The third, the predictive model, took things a step further. This model is adjusted to incorporate audience & content factors. These dramatically affect audience engagement levels and advertising rates.
To calculate website revenue, start with your current base of traffic. This should be the number of sessions which is reported to you via Google Analytics. Each of these visitors is potentially an advertising prospect. Next, calculate the typical pageviews which a single session displays to those visitors. That gives you the number of opportunities to show ads. Advertising space is generally priced in RPM - or rate per 1000 impressions. Google AdSense and many other major networks will report on ad unit RPM at both a unit and page level. We restrict our model to using page level RPM's for several reasons.
Excellent question. We use page level RPM's because advertising units will cannibalize each other's revenue. This occurs through multiple mechanisms. First, in a typical display network site, multiple bidders are trying to get on the page in each option. The highest bidder gets the best slot... and then the second best slot is awarded, and so on. The pool of bidders and maximum bid shrinks as the auction works its way down the page's ad inventory. There is diminishing returns to pudding more ad units on a single page.
Another common question. Some members of the audience love the idea of paginating their content across a bunch of pages. The problem is - this usually helps you far less than you think. A similar "exhaustion factor" applies to sessions with a high number of pageviews. While the extra page-views increase impressions, advertisers will notice the shorter page views. This will severely depress advertising rates for the website. This brings things back into balance. Several of the ad prediction questions control this in the website revenue calculator.
Yes and No. At a tactical level, you will earn more with certain formats than others. This is due to stronger ad auction demand and better audience acceptance. At a strategic level, it starts to become a zero-sum game after you've optimized the first couple of ad slots. Each additional ad slot on the page competes for a progressively lower valued bid (so the 4th, 5th, 6th bidder). Plus you eventually hurt user experience, reducing the time people stay on site. All of this is baked into the website revenue calculator estimate.
Think about it like going to a party. At first, the room is empty and silent. What you say matters, in terms of what your audience hears and does. The same applies to your first ad or commercial message on a page. Having a couple of people saying the same message probably increases the impact a little bit. This is like putting multiple calls to action for an offer on a landing page. Having multiple speakers improves the experience as well, since the audience has options. Don't want to discuss the stock market? No problem, did you see the football game? Or that celebrity's dress? You may stay and chat a while.
Keep adding promotional messages, especially aggressive ones such as popups and auto-play videos. The scene quickly degenerates into a loud bar on Saturday night where you can't hear anyone. So you leave.
Ad results need to be viewed holistically, looking at entire pages and sessions. (We're a fan of Ezoic's EMPV concept, which optimizes ad revenue using session level results).
To determine "how much is this site worth" , we added a few things to the website revenue calculator. We built a predictive model for ad rates. This uses a sample of 100 websites where we have vetted traffic and earnings information. We made additional adjustments for different advertising networks and site formats. This data is not available through other sources (derived from various studies we ran). To use the ad rate predictor, update the scorecard data below the calculator.
The model for predicting advertising revenue uses a study of 100 small websites. The sites were clustered and we spotted factors that predicted their advertising rates. We made adjustments based on other experiments and feedback from advertising networks.
Before we start, it is important to note that there are many ways to win here. We will look at your site's traffic from the perspective of an ad buyer and rating your ad inventory. They view ads as being highly profitable or less desirable based on their economics. This view may vary sharply from your own perspective as a publisher. Cat video fests and click-bait are an excellent example of this. While a brand buyer may turn up their nose at this volume... if you're able to generate the traffic cheap enough, you can make a ton of money in their niches. So don't get offended, please. Meow?
The good news is the website revenue calculator is built to handle all the options. Did you build a top-tier website, optimized via machine learning, and use premium ads? You're covered. Want to pull cheap click bait traffic off Facebook onto a non-brand safe meme site and spam them with low end ads? You're covered too. There are many ways to win in this game.
The website revenue calculator quotes page level rates vs. pricing for individual banners. Performance can vary widely between advertising slots based on visibility and click rates. This approach works because there are diminishing returns to putting more ads on a page. Reader attention is finite and you begin to run out of high quality buyers in the auction.
The default settings in the website revenue calculator assume a basic information blog. We set the audience at 50,000 visits per month. We assume each visitor reads 2.5 pages of content and page level ad rates are $4 per thousand page-views. This will generate $500 per month in advertising revenue. The model is intended to get the "order of magnitude" for a site's performance right. There are many small factors within a particular concept that can drive a 20% to 30% swing in results. We're more concerned with the big swings that will explain the gap between a $3.50 CPM and a $35 CPM.
The core of the model came down to three key factors:
So now that we've solved for the what we're selling to an advertiser , we need to solve for the how we build an audience. This includes decisions about traffic generation, content type, and overall advertising program execution. We're watching three main factors:
Does niche matter? Absolutely. Especially at a tactical level when you're designing content and assessing ad partners. At a strategic level, however, niche is a poor predictor of advertising performance. Most games and puzzles sites have low commercial intent. But an app install affiliate or an Amazon puzzle affiliate can earn quite a bit. Those sites have a very high revenue per session. Same niche, vastly different results.
Our approach is to step back and look at commercial intent. You can estimate this by thinking about two things:
If you think about it, a lot of "high earning" AdSense niches tend to fall into this structure fairly nicely. Insurance quotes? You make a lot of money selling insurance. Quotes implies the traffic is close to buying. Probably a high value commercial audience. Streaming free videos? Probably not great, although you might be able to upsell some people to a paid product at some point. Put that on the lower end of the range. Yes, this is a site by site (maybe article by article) judgement call.
There's also a zone in which you can't predict how well a site will perform, since there are so many other factors. *shrugs. Don't know, go test it. I can, however, assure you that both websites will earn more per visitor than a cat video site.
There are big differences in spending power and competition for different regions. English speaking traffic from US / Canada / UK / AUS / NZ tends to lead the pack in terms of advertising CPM rates. We break out everyone else into a third bucket.
Our website advertising rates calculator assumes you attract a global audience. We assume this is likely concentrated in a particular region. If you've got tighter focus (specific country, urban area) you will need to use actual data. There is plenty of variation below the surface here at both the country and the local level. If you are heavily local, consider direct-selling ad placements to local merchants. There is a risk you may not have enough local competition on the ad exchange.
While there are some exceptions, mobile ad CPM's are still lagging larger screen sizes. This gap has been closing as customers get increasingly open to buying over a mobile device.
You should always consider "when" a typical user will be accessing the property. Technical content and professional content is often accessed from work (usually a desktop). Older audiences also prefer to do their shopping from a fixed machine. Entertainment and news is often consumed on mobile devices. The user is often "waiting" for another activity to finish. We adjust the website revenue calculator to reflect these differences.
Device preferences can vary sharply by demographic, particularly age. Use responsive design to ensure content and ads look good across the full range of your users.
The problem with click bait sites is the reader has very little "real" interest in the content or any offers. This winds up decreasing the amount advertisers are willing to pay to run ads there. The same applies to "low attention" traffic where bored readers browse a list of articles. This includes Reddit or Hacker News.). Any good AdSense CPM calculator should dial back the estimates for these users.
I'm not condemming the click bait strategy, by the way. These are cheap traffic sources. You can easily get 10,0000 to 50,000 visitors from a good placement on those sources. At minimal cost (just posting a link). But these sites are unlikely to earn a full advertising rate. This is why we carve the number back in our website ad revenue estimator.
Spreading your content across a large number of pages is an old trick. More pageviews means more ad space - and accidental clicks can always happen. It worked very well about 10 years ago.
Does it work today? Perhaps. But it is getting less useful as a result of changes in ad network policies. First, most ad networks have lightened up on the "max units per page" policy restriction. This lets you to add more units to a long article as long as you stay within Google's "Valuable Content" policies. Accidental click detection has gotten a lot better and can trigger automated penalties. It's worth testing but is not necessarily a goldmine.
The nature of how ad exchange bidding works tends to limit your revenue on successive pages. Most advertisers have an impression cap on their campaign. This limits the number of times a high paying ad can be shown to a particular visitor. After the first couple of pages, the list of bidders gets shaggy, in terms of what they are willing to pay for the ad space. This does vary by website. We incorporate this into the advertising revenue calculator.
One pageview generation technique that does work is related content promotion. Instead of spreading an article across five pages, add calls to action to lure the audience to dig deeper. This type of up-selling is harder to execute but can be very rewarding. A little affiliate marketing copy-writing is helpful in developing effective calls to action.
While this is a page views to ad revenue calculator, you must be honest about user engagement. Incidentally, there is no easy way to build a page view calculator for sites you don't own... too many site specific and traffic source specific variables. You can get insights from SEMRush's traffic analytics product.
As we discussed above, there is a strong hierarchy among the ad networks for access to high paying brands. As a publisher you should generally prefer brand ads to direct response ads. The brand buyer will invest beyond the profits from any initial click. Most direct response buyers need to recover their ad spend from the first sale. Of course, if you see an opportunity to close the sale yourself with affiliate offers, by all means run that. Affiliate marketing often earns far more than display ads.
The bottom falls out of the market once you get below the level which is approvable for Adsense. This is very true once you decend into content which is not "brand safe". Rates fall because the only bidders are direct response buyers pushing affiliate deals. The user experience can get a little raw (see my comments about Shouters; this is their playground). If you can find your own affiliate offer to run (tshirts? printable art? get creative), that's one potential way out. Otherwise, keep expenses low. This lets you run at a lower earnings per thousand visitors from display advertising.
On the higher end of the market, you move into the world of direct placed ad inventory from leading brands. These are sold through premium ad networks, which is reflected in our predictions. Most of these operate on an invitation basis. This can increase your earnings on a part of your traffic. Since this volume is sold directly to brands, most ad networks need a higher share of revenue. We moved onto Ezoic's premium ad program earlier this year and it generated a nice bump.
You are probably asking "How Much Is My Website Worth"? The data was part of our effort to build the most accurate website value calculator. Website profit is a function of unique users multipled by your advertising CPM rates. We adjust this for expense structure (of course). I'm not a fan of a unique users calculator - there are too many variables depending on traffic and SEO strategy. You can solve for the second part above (the website ad revenue calculator).
So to address the question of how much is my site worth, you must to estimate your potential flip value. This is the resale value of website). You can extend this website revenue calculator into a website value calculator. This will tell you how much is a website worth. To do this, you need to apply an appropriate multiplier to your website's current income. For a "blog worth calculator", you should adjust this for the expenses of new content. Regular content websites publishing evergreen content should be a little more durable. Industry multiples range between 2.5 and 4 years of earnings. The best website value calculator results tend to stay within this general range.
Need a more precise estimate or assessment of your website? Contact me on Upwork or drop me a line at firstname.lastname@example.org. Available for website acquisitions, digital publishing, and monetization strategy analysis.