Ad revenue, also known as advertising revenue, is the income generated by displaying ads to users within an app or on a website. Advertisers pay app developers or website owners to display their ads to a target audience, and the revenue generated is shared between the advertiser and the app developer or website owner.
Ad revenue is generated through various types of advertising, such as display ads, video ads, native ads, and more. Advertisers typically use a cost-per-click (CPC) or cost-per-impression (CPM) pricing model to pay app developers or website owners for displaying their ads.
In a CPC model, advertisers pay the app developer or website owner every time a user clicks on their ad. In a CPM model, advertisers pay for every 1,000 impressions or views of their ad.
Ad revenue is a crucial source of income for many mobile app developers. In fact, in 2021 mobile ad revenue accounted for more than 60% of total digital ad spending (and will grow to 70% by 2026). The benefits of ad revenue for mobile app developers include:
To calculate the revenue generated by your ads, you need to take into account several key metrics, such as the number of ad impressions, click-through rate (CTR), cost per click (CPC), and effective cost per mile (eCPM). Here’s how you can calculate your ad revenue: