Ask HN: Estimating Ad Revenue
9 comments
Here are some things to think about...
Are you planning on direct sales or remnant advertising? Early on you'll likely be only leveraging remnant advertising since direct sales requires a large sales team or sales rep firms.
The next question is how much of your traffic is expected to be US vs international. US traffic still has some value, versus most international countries (outside of a few top markets like UK, Canada, etc) have very little online ad spend. Take a look at the following data of internet ad spend per capita in top countries to help scale revenue projections depending on expected country traffic:
http://spreadsheets.google.com/pub?key=pGQagieY9vfGVnTGpCmbg...
You'll next want to calculate number of impressions you expect on a daily or monthly basis. Just take expected growth rates for unique visitors and come up with some realistic estimates of page views per visit and number of ads per page.
Then take a look at this recent PubMatic report to get some estimates on average remnant advertising CPMs for multiple verticals:
http://www.pubmatic.com/adpriceindex/
Are you planning on direct sales or remnant advertising? Early on you'll likely be only leveraging remnant advertising since direct sales requires a large sales team or sales rep firms.
The next question is how much of your traffic is expected to be US vs international. US traffic still has some value, versus most international countries (outside of a few top markets like UK, Canada, etc) have very little online ad spend. Take a look at the following data of internet ad spend per capita in top countries to help scale revenue projections depending on expected country traffic:
http://spreadsheets.google.com/pub?key=pGQagieY9vfGVnTGpCmbg...
You'll next want to calculate number of impressions you expect on a daily or monthly basis. Just take expected growth rates for unique visitors and come up with some realistic estimates of page views per visit and number of ads per page.
Then take a look at this recent PubMatic report to get some estimates on average remnant advertising CPMs for multiple verticals:
http://www.pubmatic.com/adpriceindex/
Thank you very much, this is all I was looking for. Much appreciated!
Depends on what you use. Google is actually good if you're just getting started and you want to learn about CPC and the eCPM of ads.
Just learn these key phrases (CPM, CPC, eCPM) and then, do google searches from there. You would want to do a bottoms up analysis (for every one active user, I get 12 pageviews, each 1K pageviews serves 50 cents). Then you just graph it out.
Just learn these key phrases (CPM, CPC, eCPM) and then, do google searches from there. You would want to do a bottoms up analysis (for every one active user, I get 12 pageviews, each 1K pageviews serves 50 cents). Then you just graph it out.
There's no good way to estimate it, I'd just go for google ads to start and see what you're getting and graph that out as ALee said.
Your best bet would be to find out how much traffic you're getting each month and attempt to privately sell ads. You can get much higher CPM if you sell private ads versus going through Google.
Your best bet would be to find out how much traffic you're getting each month and attempt to privately sell ads. You can get much higher CPM if you sell private ads versus going through Google.
#1: Google Adwords -see things from the other side of the equalation.
So, basically you go, sign up (best spent 15 bucks, ever), start a new compaign, and type in a web site with similar content to the one you're about to build; select all collected keywords, which are related to your venture, and behold the traffic estimator. Two points of data are of interest for you here: estimated avg CPC, and estimated clicks/ day; the first one will tell you how much you would earn _relatively_ to other keywords (remember, G takes a cut); the other will tell you how much of a niche you are.
#2: fail fast: you actually go out, and build a stub of your grand vision, stick up the ad network of your choice (it's always best to shop around), and measure it. You'll get much better data, than any other method -both from ad networks, and as market research (whether people would actually use your stuff) Good luck.
So, basically you go, sign up (best spent 15 bucks, ever), start a new compaign, and type in a web site with similar content to the one you're about to build; select all collected keywords, which are related to your venture, and behold the traffic estimator. Two points of data are of interest for you here: estimated avg CPC, and estimated clicks/ day; the first one will tell you how much you would earn _relatively_ to other keywords (remember, G takes a cut); the other will tell you how much of a niche you are.
#2: fail fast: you actually go out, and build a stub of your grand vision, stick up the ad network of your choice (it's always best to shop around), and measure it. You'll get much better data, than any other method -both from ad networks, and as market research (whether people would actually use your stuff) Good luck.
I have had eCPM from $0 to $200+. Its impossible to estimate based on what you have provided.
I have one site that is doing $70 eCPM with adsense. You can use that number for your estimate, if you want. It's like 1996 all over again!
I have no idea whether my system will prove to be accurate, but it's a start:
Number of users * avg page views a day = total page views/1000 = inventory. Then do a % of your inventory of sold as CPM * a CPM rate. Next do a % of your inventory sold as CPC * a CPM rate. Then can ad affiliate marketing % and so on.
Build all that as a spreadsheet and you can play with all the numbers with all the numbers as you do research in your space as mentioned on previous comments.
Number of users * avg page views a day = total page views/1000 = inventory. Then do a % of your inventory of sold as CPM * a CPM rate. Next do a % of your inventory sold as CPC * a CPM rate. Then can ad affiliate marketing % and so on.
Build all that as a spreadsheet and you can play with all the numbers with all the numbers as you do research in your space as mentioned on previous comments.
Arn from MacRumors said it best. Traffic to your site gives you power which brings along advertising revenue.
As noted elsewhere, your revenue from advertising can vary considerably based on several factors including:
1. The market you're in 2. The profile of your visitors 3. The degree to which you're engaging them 4. The kinds of products/services being advertised
1. The market you're in 2. The profile of your visitors 3. The degree to which you're engaging them 4. The kinds of products/services being advertised
Just go ahead and guess $0 cpm. You won't be far off.
Why is this being upmodded? I guess it's funny if you don't have a clue how to make money with advertising...
CPM rates vary massively with sector. Try it out and see what sort of rates you get, I don't think you can estimate these sorts of things well.
I run a 'free stuff and competition' website, and that typically gets $5-$10cpm. For a finance or gambling site, probably multiply that by 10. For a social network site probably divide by 10-20.
Also remember adsense is only one form of advertising, which works well on some sites, not so well on others. You can often get better payouts going for per lead or per sale affiliate programs.
CPM rates vary massively with sector. Try it out and see what sort of rates you get, I don't think you can estimate these sorts of things well.
I run a 'free stuff and competition' website, and that typically gets $5-$10cpm. For a finance or gambling site, probably multiply that by 10. For a social network site probably divide by 10-20.
Also remember adsense is only one form of advertising, which works well on some sites, not so well on others. You can often get better payouts going for per lead or per sale affiliate programs.
How good of an answer can you give to someone who asks for a revenue estimate for advertising without telling you anything else at all? He either doesn't understand any of the relevant factors, in which case it's laughable, or he's for some reason not sharing them, which is begging for nonsense in reply. Given that he's trying to do "revenue estimates" in this manner, I'd guess the former.
Ah perhaps I was reading too much into your post then. I thought you were suggesting ad-supported isn't a viable model or something ;)
I agree, the original question is extremely vague, and hints at some naivety... If the revenue estimates are for a business plan, or to show investors, may be best for him to step away from the computer and stop now.
I agree, the original question is extremely vague, and hints at some naivety... If the revenue estimates are for a business plan, or to show investors, may be best for him to step away from the computer and stop now.
He wasn't asking us to tell him how much he would make in advertising on his site. He was asking us for resources online that he could read/research/utilize so that he could make the estimate himself.
justfuckingoogleit.com
Thanks!