Maximize ad revenue with effective inventory selection and expansion

Balancing supply and demand in your ad business

There are many elements to consider when managing the supply and demand in ad businesses, ensuring that you effectively drive demand whilst prioritizing high-conversions. Some of these elements include:

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Understanding supply and demand

Demand is the driving force behind ad revenue, influenced by the number of advertisers in the platform and their allocated budgets. At the same time, supply encompasses the total impressions and clicks generated from the ad inventories available on the platform.

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How to increase ad supply

One of the most straightforward methods to boost ad supply is augmenting available inventory across the website. While auction pressure can potentially drive up cost-per-click (CPC), expanding inventories offers a more accessible approach to accommodate increased demand.

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Strategic ad inventory selection

When selecting ad inventory, platforms should prioritize high-conversion and high-traffic sources to maximize value. Understanding current or expected demand levels is key to estimating the necessary inventory, starting with high-conversion rate pages to drive early value and seller engagement.

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How to increase revenue growth through ad inventory expansion

Expansion of ad inventory is a pivotal strategy for driving revenue growth over time. Platforms should consider expanding inventory when budget utilization is low, typically below 40%, to ensure efficient allocation of resources.

Utilizing various products and inventory types is essential for diversifying offerings and attracting a broader range of advertisers. By continuously expanding and optimizing ad inventory, platforms can unlock the full revenue potential of their ad businesses.

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Success story: Marketplace A in effective inventory selection and expansion

Marketplace A is an excellent example of effective inventory selection and expansion strategies. Initially, the platform strategically opened ad inventories on pages with the highest conversion rates and traffic. 

As demand consistently exceeded supply, Marketplace A gradually expanded ad inventories to include new page types and slots, significantly increasing ad revenue.

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Ad inventory selection and expansion review 

Effective ad inventory selection and expansion are fundamental for maximizing ad revenue in auction-enabled ad businesses. By understanding demand, prioritizing high-value inventory, and strategically expanding inventory over time, platforms can unlock the full potential of their ad businesses and drive sustainable revenue growth.

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Download our guide on ad inventory selection

If you would like to learn more about how to effectively maximize your ad revenue, you can download our guide on ad inventory selection and expansion here.

Make sure to read our first article in our GrowthU series, where we focus on how to successfully launch a digital ad business.