

How does impressions effect a site's revenue model - tomerb

Hello all,<p>I've been working on a business plan for a web site that relies on advertisements as a revenue model. During, I stumbled upon a shady area - the "impressions".<p>The "impressions" is the number of different advertisements a site can show it's visitors.<p>The problem was - how does the impressions effect the revenues of the site?<p>My thought was that it effects only the click rate (percent of clicks per total views). Average click rate of a site that does not target advertisements to users is around 0.5%.
Obviously this number must change according to the impressions, but how??<p>My formula was:<p>clickRate = 0.5 * Min((adsPerPage * pageViews), impressions) / (adsPerPage * pageViews)<p>adsPerPage: Amount of ads displayed on a single page.
pageViews: Average amount of pages viewed by a user per day.
clickRate: The chance of a single user to click on an ad in a day.<p>The formula means that if there are more ads to show then a user can see in a day, the clickRate stays 0.5, but if there are less ads to show - there is less chance a user will click, thus the clickRate decreases.<p>What do you think?
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tomerb
Too heavy, huh? :)

