How to Evaluate Ad Revenue Potential
12th December 2007
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If you own a website, and want to serve ads using a 3rd party ad server, then here is a method to calculate the Ad Revenue Potential. Either use your own Web Analytics or use Compete to discover the Visitor and Page View metrics. Method #1 to Calculate Ad Revenue Potential: Let’s say there are 5 ads/page. Add up the total of ads on page. The Total Ad Revenue on each page is: $22.50 CPM Let’s say there are 20,000 Visits/Month, and each visitor has 7 Page Views per Visit. Thats 20,000 x 7 = 140,000 Page Views. 140,000 x 5 Ads = 700,000 Impressions. The formula is: CPM x Impressions / 1000 = Ad Revenue Method #2 (Simple Method) to Calculate Ad Revenue potential: Remember to abide by the IAB Rules - Terms & Conditions. Bonus: Naturally, the smart marketer will look for ways to increase Engagement (Page Views), and Traffic (Visitors). No related posts. |
December 13th, 2007 at
In method one you add all the ads on one page to get the 22.50$ CPM and then you calculate 140,000 page views. Why do you multiply again the page views by 5 for 5 ads unit, since it’s already factored in the CPM of 22.50$. Or I am missing something? This would give revenues of 3150$ instead.
December 13th, 2007 at
The $22.50 is the revenue from the combined 5 ads.
So, if there are 20,000 Visits/Month, and each visitor has 7 Page Views per Visit. Thats 20,000 x 7 = 140,000 Page Views.
140,000 x 5 Ads = 700,000 Ad Impressions.
$22.50 CPM x 700,000 Impressions = 15,750,000.
So, 15,750,000 / 1000 = $15,750.
December 19th, 2007 at
Since you are using the total CPM of the first example you need not multiply by the number of ads on the page. The formulas you provide all give different answers when you use the same numbers so they cannot be correct. the correct formulas should be:
(Users * Pages/user * Ads/page * Average CPM) / 1000 = Total Revenue
AND
Total Desired Revenue * 1000 / (Users * Pages/user * Ads/page) = Average CPM