For many Web entrepreneurs, display advertising is one of the primary methods of monetizing traffic. Display advertising is a part of everyday life on the Web, and is in many ways a very simple concept and monetization method. Of course, there are countless different implementations, pricing strategies, and degrees of success achieved with display advertising; some websites utilize make a significant amount of money and fund their operations from display advertising, while others generate relatively meager earnings from ads.
Advertisers pay publishers (and other site owners) to have their messaging appear next to the site’s content. Just like Coca-Cola may pay to have its messaging appear in the middle of Modern Family, the company may pay to have its ads appear on any number of websites. Besides “display advertising,” there are a few other commonly used terms referring to aspects of this monetization method:
- Impression: An impression is “served” every time one visitor sees a single advertisement. So if there are four ads on a page, there are four ad impressions recorded each time someone views the page.
- eRPM: Short for Effective Revenue per 1,000 impressions, this term indicates how much money is earned for every 1,000 impressions on a website. This is a standardized metric publishers use to calculate how efficiently they are monetizing their traffic; the higher the eRPM, the more you’re making from every visit.
- Ad Unit: A single ad placement on a website, defined by its location on the page and the dimensions of the ad shown. For example, a 300×250 above-the-fold medium rectangle is an ad unit (as shown in the screenshot above).