Optimizing Total Ad Revenue is one of the best ways to maximize the value of your ads. There are technically two kinds of ad revenue: the money you get from advertisements for your own business and the money you get from hosting ads from other businesses on your website, social media, etc. In this article, we’ll be focusing on the money you get from advertisements for your own business. This version of the metric gives valuable insights into areas of future growth and improvement. We'll take you through how to calculate this metric, how to understand it in the context of your industry, and how to apply it to the platforms you're using now.
How to Calculate Total Ad Revenue
You can calculate Total Ad Revenue by multiplying the number of conversion from ads by the conversion value. Total Ad Revenue can be assessed for various time-periods (i.e. day, week, month, year) and, if your page views are tied to certain products or campaigns, you can assign a specific Total Ad Revenue for each.
If you’re confused about how to define a conversion from ads and conversion value, we’ve included some nifty definitions and examples below:
- Conversion from ads is the number of visitors who complete a certain action due to an advertisement.
- Conversion value is the monetary amount that you assign for specific conversions regarding its impact on your business. Not all conversion values may be equal. As Google puts it, “If you own an online store with a shopping cart... one purchase conversion might be worth $25, while another is worth $500.” On the other hand, if you want to assign value to email sign-ups, then you may just use a blanket value of $5 per email.
When choosing what to include in your calculations, remember: consistency is key! That means, if you decide to include XYZ in your Total Ad Revenue for the month, you should include it in the next month’s Total Ad Revenue as well. Having consistent metrics will allow you to identify the causes of good or bad performance better. For instance, if you increase your conversions for the month and your ad revenue is still lower than the last month, then you are likely getting low-value conversions and may want to consider optimizing your ads for higher-value products.
Connecting Total Ad Revenue to Your Business
Again, as you begin (consistently) monitoring Total Ad Revenue, you’ll be able to find insights specific to your strategy. Of course, it’s also important to understand your Total Ad Revenue concerning your broader industry. To help you know what to expect, we’ve included a list of average Ad Revenue growth per industry:
- Retail - 21%
- Financial Services - 13%
- Auto - 12%
- Telecom - 9%
- Leisure Travel - 9%
- Consumer Packaged Goods - 6%
- Electronics & Computers - 8%
- Pharma & Healthcare - 5%
- Media - 5%
- Entertainment - 4%
Further, while you can find conversions from many channels, we’ve identified popular platforms that are particularly relevant to Total Ad Revenue. These may be the right places to begin if you’re getting started with this metric:
- Facebook is one of the biggest social media platforms around the world, and it has its own business feature now. With its Ads Manager, you can now create ads and get your estimated ad revenue easily.
- LinkedIn Marketing enables its users to generate ads and find the amount of conversions from certain ads. From there, you can calculate ad revenue by also assigning conversion values to your ad’s conversions.
- Google Ads allows you to access the Total Ad Revenue on your main dashboard.
Tracking Total Ad Revenue with Lido
While Total Ad Revenue is easy to calculate, it’s important to keep in mind that Total Ad Revenue is one of many valuable metrics to track your performance. If you don’t want to spend hours at the end of the month juggling numbers from your Facebook and LinkedIn accounts, consider trying Lido. Lido can help you build a dashboard to monitor your data and give a look into how your key metrics (such as Total Ad Revenue) change over time.
Sign up for free and get started today.