Ad networks work as an intermediary between the publications and the advertisers. They help publishers optimize their revenue while making sure that the advertisements reach the right audience.
If you want to create ad network and make sure it eventually becomes profitable, you will have to choose the right monetization strategies. This article explores some of the most effective monetization strategies that can help give life to any new advertisement network.
Understanding Monetization in Ad Networks
Monetization for a newly created network for advertising needs to include different ways of generating revenue. The profitability of such a system largely depends on how effectively it can use its monetization strategies.
You can use several revenue models to get income, each with its pros and cons. The most common of them include:
- CPM (Cost Per Mille). Advertisers are paid according to how many times their ad is viewed, regardless of whether users click the ad or not.
- CPC (Cost Per Click). In this type, advertisers get paid when their ad gets clicked by users, which makes this format performance-driven.
- CPA (Cost Per Acquisition). This is when an advertiser pays on the return of a specific user action, which could be a purchase or a sign-up for something.
- Revenue Share. The ad network takes a cut of the overall revenue generated by the ads, usually through a split agreement with the publisher.
Each model works differently. It’s based on the target audience of the advertisement network you created and advertiser goals, among other things. The right model would give you a balance between revenue and the risks involved in running it.
Direct-to-Ad Sales
One of the most successful ways to generate revenue is through direct sales to advertisers. This can provide the network you or experts like Attekmi create for you with better control over pricing and distribution. Through direct sales, the platform will be able to negotiate the prices directly with the advertisers.
Of course, direct sales have certain drawbacks. Building a loyal clientele and earning their trust takes time, but there are considerable advantages in terms of control and profitability.
Programmatic Promotion
This type is automized reselling and buying of ad inventory through direct or real-time bidding. In RTB, the available ad space is bid by the advertisers, and the highest bidder wins the spot. While in programmatic direct, publishers and advertisers make pre-decided non-auctionary deals.
The scalability of the inventory is a crucial benefit of programmatic advertising. By automating the whole process, a network could make more effective monetization of ad inventories. And if you want a professional team build and ad network for you, you can always rely on Attekmi.
Private Marketplaces (PMP)
Private marketplaces are where publishers can sell their high-value ad inventories to preselected advertisers over an exclusive platform. So, since such advertisers that attend these marketplaces are usually prepared to pay more to access premium ad space, PMP helps ad networks to set higher prices for their inventory.
To build a private marketplace you will need to create a curated environment in which inventory is handpicked and sold to premium buyers. For new ad networks that have access to attractive or unusual inventory, this approach might be very profitable but may require a more complex setup.
Native Ads
Those are less intrusive since they are designed to fit in with the content of a website or app. They feel like a natural part of the user experience and can take many different forms, like sponsored material or suggested articles. Native ads don’t disturb the users, so normally they have higher engagement rates.
This creates a great opportunity for the networks to monetize content in a non-disruptive way. Successful native advertising is all about finding a sweet spot that can balance monetization with customer satisfaction.
Lead Generation and Affiliate Marketing
Ad networks are good for performance-based earning models such as lead generation and affiliate marketing. In such models, the marketer pays only when certain consumer activities occur, such as clicking, filling out a form, or making a purchase. A network can either tie up with different individual advertisers that operate on commission per lead or sales generated or link directly with any affiliate programs.
It offers new network revenue generation independent of the typical display ad used to fill inventory. Affiliate marketing techniques, in particular, are great when there are specialized goods and services to deliver or niche markets to target. If a network can attract the right kind of audience, then it is a low-risk method that can bring steady revenue.
Subscription-Based Access
You can also implement a subscription-based approach. You can introduce a subscription fee for an ad-free experience for the subscriber. Other than offering value to customers who would like to scroll without interruptions, subscriptions can also be an exceptional means for the network to generate predictable revenue.
There are good things and bad things about this model. Subscriptions can provide more stable and predictable revenues, which is good. The bad news is that it could limit the number of potential subscribers who would pay for that type of service.
Diversifying Sources of Income
Typically, one successful ad network works with several different monetization strategies to increase its revenue. You should combine a set of models like affiliate marketing, programmatic advertising, native ads, and direct sales to amplify multiple points of revenue instead of depending on one strategy alone.
Diversifying sources of income helps to create stability and adaptability. For instance, while scalability can be provided by programmatic advertising, the margins for direct sales may be huge. Meanwhile, affiliate marketing can show income based on performance-driven actions, and native ads can increase engagement.
If you are just starting out in this business, you will get the best chances if you use different methods of earning your income. It can be quite risky to rely on just one type, so don’t put all your eggs in one basket. Choose a few, and see where it leads you.
Final Thoughts
Making the right monetization decisions right from the start will be important to the long-term success of a new ad network. Adaptability and flexibility are key here. A new platform will remain in business and competitive by testing different models, fine-tuning campaigns, and working on tactics constantly. Up-and-coming networks can set themselves up for growth with various monetization techniques—a sure path to success!
