You know you need to diversify your advertising by launching campaigns across channels. This way, you can reach customers on their favorite platforms — and avoid the risk of putting all your eggs in one basket.
Even when advertisers pulled or decreased their ad spend due to COVID, many publishers still saw revenue growth.
Because they spread their efforts across channels.
Especially since e-commerce is expected to grow by 18% this year, there’s never been a better time for publishers to branch out and try new channels. As Interactive Advertising Bureau CEO Randall Rothenberg told Digiday, “You need to diversify your revenue streams. Period, full stop.”
So, that part’s covered. (And if it’s not, read about multichannel advertising here to learn more.)
The problem now is, you’re not sure how exactly to measure the ad revenue from those campaigns. And that’s a big deal, because with the right calculations, you can better understand audience behavior, optimize your pricing, improve your campaigns, and enhance customer experiences.
That’s where this guide comes in.
We’ll break down just what multichannel ad revenue is and how you can measure it across the most valuable and engaging advertising channels.
What is multichannel ad revenue?
Let’s start with a simple definition of ad revenue: the amount of money you earn from running advertisements, such as display ads or native ads.
Now for a definition of multichannel advertising: the process of creating and distributing promotional content across channels, such as email, websites, and push notifications.
Multichannel advertising is so important because it helps you gain a more comprehensive view of customer behaviors and interests, and deliver personalized ads that match those specifications.
So, put both of these concepts together and you get multichannel ad revenue: the amount of money you earn from running advertisements across channels.
How do you calculate ad revenue?
Now for the fun part — making those calculations.
To start, there’s no one-size-fits all calculation for ad revenue. That’s because publishers can charge advertisers based on a few different metrics, including:
Cost-per-thousand-impressions or cost-per-mille (CPM) measures how much you earn each time an ad earns 1,000 views.
That revenue calculation looks like this:
Total impressions / 1,000 X CPM = Revenue
For example, say you charge advertisers a $10 CPM and you have 200,000 monthly website visitors. You might expect to earn $2,000 a month if each of those visitors view an ad once.
Here’s how that works:
200,000 impressions / 1,000 X $10 CPM = $2,000
Cost-per-click (CPC) measures how much you earn each time someone clicks on an ad. That revenue calculation looks like this:
Total clicks X CPC = Revenue
Say you charge a $0.5 CPC. If 200,000 people see your ad but 10,000 people click on it, you earn $5,000.
Here’s how that works:
10,000 clicks X $0.5 CPC = $5,000
Cost-per-acquisition (CPA) measures how much you earn each time someone converts after viewing your ad. This acquisition or conversion might come in the form of an email sign-up, app download, or purchase, for instance.
Similar to CPC, your CPA is calculated like this:
Total acquisitions X CPA = Revenue
So if you charge a $2 CPA and 1,000 of your readers convert, you earn $2,000.
How do you calculate multichannel ad revenue?
To calculate multichannel ad revenue, you’ll want to combine the ad revenue you generate from each channel.
Specifically, let’s break down how you can drive revenue across some of the most engaging channels available today:
Email ad revenue can be a safe and reliable channel for those who are struggling to drive revenue elsewhere. Email ads reach customers where they’re already engaged with opt-in content and they’re impervious to ad blockers that are commonly deployed across the web.
In fact, 24% of publishers saw their email ad revenue increase after the coronavirus crisis hit.
Just look at Travel Media Direct, which runs a series of publications and email newsletters for personalized travel deals. To monetize its 3-5 million monthly newsletters, the company sells targeted CPC ads to reputable brand partners. As a result, they’ve been able to increase monthly revenue by $1,500 – $2,000.
Despite the pandemic, revenue from display ads — like those seen on the top, bottom, and side bars of websites — will still increase by 5.3% in 2020. This bears some hope, especially when compared to search ad spending, which will likely decrease by 0.2% this year.
For inspiration, take trivia publisher Jungo Labs. They launched website ads across two digital destinations, TriviaSmarts.com and Popcornbrain.net. This strategy — paired with an email ad program — helped the publisher quickly increase CPM by 80% from $1.65 to $3. Thanks to that jump in revenue, they even added more than 150,000 unique users in the process.
Over 70% of your audience already uses push notifications. Just like email, they’re opt-in, direct-to-consumer, and curated to each user’s needs. They can also reach your audience wherever they are with offers, updates, and reminders that fit their unique experiences. And now you can monetize push notifications, too.
The GoGy games platform, for instance, was already delivering website ads to its 10-12 million monthly users. But they knew they needed to diversify their ad channels in order to increase revenue and engagement. So they began delivering personalized, automated push notifications based on specific user interests. And by putting ads in those notifications, they had an opportunity to monetize virtually every message, since push notifications are basically guaranteed to drive impressions — reaching users when they’re active on desktop and mobile.
Apple’s news reader platform boasts over 125 million monthly active users who rely on the app for information and entertainment from their favorite publishers. And those publishers rely on the app to reach new audiences, build loyal user bases, and, of course, drive revenue.
In fact, news readers are ripe for selling ad placements. As recommended among our Apple News campaign optimization tips, it’s best to price CPM and CPC at a competitive rate, and enable a wide range of supported ad sizes and formats. You can also target audiences by age, engagement level, device, gender, location, and subscription status, so you can increase your likelihood of generating impressions and clicks.
How do you increase multichannel ad revenue?
Now that you know how to calculate multichannel ad revenue, you probably want to start driving up those numbers. And there are a few key ways to do it:
- Launch native ads. Deliver a more intuitive user experience by offering ads that fit into their surrounding content, driving increased impressions and clicks.
- Personalize your messaging. Make sure each ad is tailored to a target audience, so you know you’re only reaching the most relevant and interested consumers.
- Choose the right partners. You don’t have to do it all alone. Find the right partners to help you manage, execute, and track your multichannel campaigns and ad revenue.
That’s where PowerInbox comes in. Built exclusively for publishers and advertisers, our platform runs and automates your email, website, and push notification ad campaigns in one place. So you can seamlessly distribute and track your multichannel operation — and start watching that revenue climb.
Ready to supercharge your multichannel ad strategy? Reach out to PowerInbox today.