Glossary | A | Ad Revenue

What is ad revenue?

Ad revenue is the amount of money that an app generates by displaying ads. There are two factors that affect an app’s advertising revenue: The number of advertising impressions that the app delivers, and the app’s eCPM. An ad impression is counted whenever an ad is displayed within an app. eCPM is an industry term for “effective cost per mille,” or the average value of every 1,000 ad impressions that an app delivers.  

Ad revenue = impressions * eCPM  

For example, App A might deliver a relatively low number of ad impressions, but command a higher-than-average eCPM, because the audience it caters to is in high demand from advertisers.  

App A’s ad revenue of $100,000 = 10 million impressions * $10 eCPM  

By comparison, App B might deliver a much higher number of ad impressions, but earn less money than App A because the audience the app caters to is not valued as highly by advertisers, due to the audience’s geographic location, purchasing power, or interests.  

App B’s ad revenue of $50,000 = 100 million impressions * $0.50 eCPM  

Ad revenue is crucial because it allows app developers to generate they income they need to sustain their operations, continue producing new content and invest in future growth. Advertisers use ad revenue calculations to reach their target audience in an efficient manner, to meet their company’s goals.