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Ad Networks Are For Idiots -- And Here's The Math To Prove It

This is a very interesting article to read if you are a publisher or a blogger. Simply understanding the revenue sharing you get from your current Ad Network will help you realize to step-up and re-organize to bring more "bucks" to your pocket. Enjoy reading.

"Competing for Scraps:
First, it is important to understand that the revenue distribution among publishers is an extremely non-linear curve. The top 10 publishers in the U.S. capture more than 70% of every online advertising dollar, and the top 50 publishers capture a whopping 91% of all online advertising dollars.

As for the other 9%? There are estimated to be more than 250,000 publishers using Google AdSense alone.

The long tail is very long, very crowded, and very poor.

It Only Makes Sense if You Can't Count:
Ad networks now generate a whopping 27-cent average CPM, while premium publishers rake in a $20.17 average CPM through direct sales.

Publishers earn 74.7 times more money per page when they sell ads direct.

The problem is that the average premium publisher only sells 30% of its inventory direct. This leaves every publisher with a critical decision: What to do with the other 70%?

This is where people start to use bad math.

If a publisher sells the entire 70% of remnant inventory through ad networks, that is equivalent to selling 0.93% more inventory direct. Less than 1%!

Figure out how to sell an incremental 0.93% as premium by innovating, not by betting the farm." (2009,


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