Let’s start with the basics

It’s safe to assume that we’ve all seen online ads. But have you really thought about what they are? What is an ad?

As a publisher, you’re selling the right to advertise on your page. Compare this to a billboard. The advertiser puts the image on the billboard, but someone else owns the billboard and the land the billboard is on. As a website owner, you are the billboard owner. You’re selling space on your website just like you would sell the space on a billboard. This is why you, the website owner, get a portion of the advertising revenue when you allow ads on your site.

On a typical webpage you have a title, content, and pictures. You also have ads. These are often found in the sidebar or at the end of the content. When you see an ad on the website, you’re usually looking at some kind of image. Maybe it’s an image of a product or a graphic that mentions a big sale.  

The actual image that is displayed on the webpage  is referred to as the creative. The creative is designed by the advertiser. The creative’s purpose is to grab a reader’s attention and pique their interest in a product, service, or brand. The advertiser hopes the creative will be interesting enough to cause the reader to click on the ad and purchase a product or service.

Every time you go to a webpage, you create digital locations where an ad can appear. These locations are called digital inventory or impressions. An impression is a unique opportunity to sell an advertising space on a website. Since you clicked on the page, there is an opportunity for the advertiser to show you something you may want to buy.

Now, advertisers want to show more than one ad to one person. Advertisers can show an ad to a lot of people and only a few will ever click on the ad. Online ads can be measured by what’s called a click-through rate (CTR). The click-through rate measures how many people actually clicked on an ad compared to how many people saw the ad. Because not everyone will click, impressions are generally bundled together and sold in bulk. Multiple impressions bundled together are referred to as inventory.

Obviously, there are a LOT of people looking at a LOT of websites every month. Advertisers want to know that they are reaching the right people on the right sites. They want to reach readers who will be interested in their product and therefore more likely to click on their ad to buy something. Because there are so many advertisers and so much digital real estate, the world of online advertising is highly technical and has become very automated. It’s all about matching up the right supply with the right demand in the most efficient way possible.

 

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