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Understanding Ad Revenue Levers

This exercise is meant to help you better understand the variables that drive your ad revenue opportunity. We strongly recommend against using this tool for forecasting, as it is meant to help your news organization make decisions across key metrics to strengthen decision-making.

WHO SHOULD USE THIS EXERCISE

  • News organizations with or without digital advertising revenue models looking to better understand drivers of digital advertising and how to optimize digital advertising offerings.

Tell us about your site to get started

What region are you located in?

Select your region
  • Select your region
  • North America
  • Latin America
  • Asia Pacific
  • Europe, Middle East and Africa

Tell us about your site to get started: Please provide inputs to better estimate your display ad revenue potential

What are your monthly page views?

How should I answer this?

Total monthly pageviews (or pageview hits, page tracking hits) are the total instances of a page being loaded (or reloaded) in a browser in 28 days. If a user clicks reload after reaching the page, this is counted as an additional pageview. If a user navigates to a different page and then returns to the original page, a second pageview is recorded as well.

I don’t know my total monthly page views

You can approximate your total monthly page views by multiplying your monthly active users (MAUs), average pageviews per visit, and average monthly visits per user.

Monthly active users (MAUs)

Monthly Active Users is the number of unique users who initiated sessions on your site or app in the past 30 days. If you are signed into Google Analytics, you can access the Active Users report to view active users by 1-day, 7-day, 14-day, and 28-day active users.

Average pageviews per visit

Average pageviews per visit is the average number of pages that are viewed during a single visit, over a 28 day period. A pageview is an instance of a page being loaded (or reloaded) in a browser. If a user clicks reload after reaching the page, this is counted as an additional pageview. If a user navigates to a different page and then returns to the original page, a second pageview is recorded as well.

Average monthly visits per user

Visits per user is the average number of times that a user visits your site over a period of time, typically over 28 days.

Tell us about your site to get started: Please provide inputs to better estimate your display ad revenue potential

What is your ad viewability?

How should I answer this?

Viewability is a way to describe a user’s engagement with an advertisement. An ad is considered viewable if at least 50% of the ad is in view of the reader for over 1 second in display and over 2 seconds for a video.

Viewability is strongly correlated with other metrics:

  • As you increase your viewability, you can expect cost per thousand impressions (CPMs) to also increase. At 70-80% viewability, CPMs are 4x higher than at 10% viewability.
  • Size, type, and location of your ad unit will impact viewability. As you increase the number of ad units per page, you can expect viewability to also decrease. Ads that are above-the-fold, or in the first view when a user navigates to a site, are more viewable and command higher CPMs than ads that are below-the-fold, or below the first view and require a user to scroll down the page. According to Google's data, ads near the bottom of the above-the-fold screen generally have the highest viewability rates. Ads placed just below the top navigation bar have a higher viewability rate than those placed at the very top of the page.

I don't know my ad viewability

Generally, 70% viewability is a good benchmark for a well-run advertising business. The average ad viewability for display ads in North America is 49-54%.

Tell us about your site to get started: Please provide inputs to better estimate your display ad revenue potential

How many ad units does your site have per page?

How should I answer this?

Ad units are containers you place on your website or in your apps to show ads to users. Ad units per page is the average number of ad units placed per page.

Ad units per page is strongly correlated with other metrics. As you increase the number of ad units per page, you can expect viewability to also decrease.

Tell us about your site to get started: Please provide inputs to better estimate your display ad revenue potential

How many impressions are allocated to Direct, Programmatic, and House?

You have total viewable impressions. Play around with the split betweeen direct and programmatic, the sell-through rate, and the CPM to see the optimal mix for your publication.

How should I answer this?

Generally, advertising is sold in 3 possible ways: Direct, Programmatic, and House ads.

Direct selling involves selling your digital advertising directly to clients. Direct sold advertising includes sponsorships and share-of-voice, two types of exclusivity: Sponsorship involves exclusively selling to one advertiser, and share-of-voice involves exclusively selling to several advertisers, with each advertiser receiving a pre-determined percentage of all impressions.

Programmatic selling involves selling your digital advertising through an automated platform. Programmatic advertising includes programmatic guaranteed (or preferred deals), private auctions, and preferred deals, which vary based on buyers and pricing: programmatic guaranteed (or preferred deals) involve a select buyer priced via negotiation, private auctions involve a set of select buyers priced via bidding, and an open auction involves any buyers priced via bidding.

House ads promote your own publication. House ad campaigns are cross-promotion campaigns that serve ads to a website or app using a publication's own inventory for free.

As you set allocation targets, you can expect CPMs for Direct to be higher than CPMs for Programmatic. However, it is often more challenging to support a mature direct sales operation, requiring xx and yy. Selling Programmatic allows you to address your direct avails, which is the available advertising inventory on your website.

Direct
Programmatic
House
Direct 00,000
Programmatic 00,000
House 00,000

Tell us about your site to get started: Please provide inputs to better estimate your display ad revenue potential

What direct sell-through rate (STR) and cost per mille (CPM) do you expect?

Average sell-through rate (STR)

Sell-through rate (STR) is the number of ads served divided by the total number of ads requested. Generally, a 60-80% Direct STR and a Programmatic 100% STR are good target benchmarks for a well-run advertising business.

For Programmatic, STRs may not total 100% for several reasons:

  • Inventory does not get sold because of seasonality-impacted sales cycles
  • Breaking news, weather, blacklisted content, or other content-based interruptions to impressions, such as when an advertiser has committed to the spend, but does not want to be next to certain content (ex. crime news)
  • Technical difficulties, such as network errors, internet congestion, timeouts, and latency
  • Bounce rate and users leaving the page before the ad loads
  • Maturity of your sales team

Average cost per thousand impressions (CPM)?

CPMs (cost per thousand impressions) is the primary way to sell ad units based on impressions (the number of times your ad is served). This is the price advertisers pay for every 1,000 impressions they buy on your site.

Generally, a $10-20 Direct CPM and a $<5 Programmatic CPM is a good benchmark for a well-run advertising business.

As you increase your viewability, you can expect CPMs to also increase. At 70-80% viewability, CPMs are 4x higher than at 10% viewability. Keep in mind that increasing the number of ad units may decrease viewability.

In our model, house ads do not drive advertising revenue, but they still have value. You can calculate the value of your house ads based on the value brought in. For example, if your house ad is driving readers to your subscriptions page, you can compare the expected subscriptions customer lifetime value against the cost of the ad.

Tell us about your site to get started: Please provide inputs to better estimate your display ad revenue potential

What programmatic sell-through rate (STR) and cost per mille (CPM) do you expect?

What is a good programmatic CPM and STR?

Generally, a $1-5 Programmatic CPM and 60-90% STR is a good benchmark for a well-run advertising business.

Tell us about your costs

How much does your digital organization cost to run?

How should I answer this?

What is the total cost of your news organization, inclusive of print, digital, and any other mediums? Be sure to include the costs associated with the following categories: newsroom, sales & marketing, product & technology, headcount, and general and administrative.

My newsroom doesn’t split out digital or I don’t know what percentage digital makes up

One way to evaluate your digital advertising revenue is by comparing it against your total cost. This helps you to frame how impactful the ad revenue is relative to what your newsroom costs.

Tell us about your sales approach: Please provide inputs to better estimate your display ad revenue potential

Summary

Estimated Revenue

Your estimated revenue is $, with Direct comprising of your revenue, Programmatic comprising of your revenue.

This information is meant to help you visualize your own data. Google does not retain any of this information.

Discover how ad revenue changes based on key levers

Edit your responses and see changes in real time

Direct
Programmatic
House
Direct 00,000
Programmatic 00,000
House 00,000
Direct
Programmatic
Revenue Total 00,000
Direct 00,000
Programmatic 00,000
House 00,000
Potential Revenue 00,000
Direct 00,000
Programmatic 00,000
House 00,000