Ok, so last time I talked about rotating banners and ads, but this is useless unless you know which banners are performing and which ones aren’t. So lets look at an example of 4 banners in rotation and see what the score is…
Banner 1
• Impressions: 1000
• CTR: 5%
• Conversion: 1:1000
• Payout: $30
Banner 2
• Impressions: 1000
• CTR: 8%
• Conversion: 1:2000
• Payout: $30
Banner 3
• Impressions: 1000
• CTR: 10%
• Conversion: 1:1500
• Payout: $20
Banner 4
• Impressions: 1000
• CTR: 10%
• Conversion: 1:2500
• Payout: $25
From these it’s difficult just by quickly looking at them to see which is the most profitable, the easiest way is to find out the CPM (Cost Per Thousand – Essentially how much money you’d make from every 1000 impressions your banner gets) of each ad, so we do…
(Payout ÷ Conversion) × (Impressions × CTR) = $ CPM
After doing this we see that…
Banner 1 = $1.50 CPM
Banner 2 = $1.20 CPM
Banner 3 = $1.30 CPM
Banner 4 = $1.00 CPM
After taking that info I’d ditch Banner 4 and replace it with another. Then let those banners run for a week, or until enough data has been collected, then repeat the process.
Doing things this way ensures you always have your best performing banners in rotation at any given time.
Until next time…