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MenuThere are several formulas for ad monetization, which are used to determine how much money a website or mobile app can earn from displaying ads. Here are a few common ones:
Cost per thousand impressions (CPM): This formula is used to calculate how much money a website or app earns for every 1,000 ad impressions. The formula is: (Ad Revenue / Ad Impressions) x 1,000.
Cost per click (CPC): This formula is used to calculate how much money a website or app earns for every ad click. The formula is: Ad Revenue / Number of Clicks.
Cost per action (CPA): This formula is used to calculate how much money a website or app earns for a specific action, such as a sale or a sign-up. The formula is: Ad Revenue / Number of Actions.
eCPM (Effective Cost per thousand Impressions): this formula take into account all the ad formats like CPM, CPC and CPA, and it is used to determine the overall monetization rate of your ad inventory. It's calculated as total earnings / (impressions/1000).
Revenue per User (RPU): Revenue per user is used to determine how much revenue each user generates on average. It’s calculated by taking the total revenue earned in a given period and dividing it by the total number of unique users during that period.
It's important to note that these formulas are just a starting point, and the actual revenue earned can depend on a variety of factors, such as the type of ad, the location of the ad, and the audience that the ad is targeting. Additionally, with the growing use of programmatic advertising, many other metrics have been added to track, like viewability, engagement, and conversion rate.
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