Revenue Optimization

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Revenue Optimization

What Scrooge McDuck can teach us about Ad Revenue Optimization

As you probably already know, Scrooge McDuck is a cartoon character which was created by Carl Barks in 1947. He also happens to be the richest person in the Disney universe who worked his way up the financial ladder from humble beginning in the US after emigrating from Scotland. So, what can Scrooge teach us about optimizing or improving ad revenues from our website?

Lesson #1 – Work Smarter, Not Harder
Scrooge’s father taught him to “Work Smarter, not Harder”. An advice which helped him all his life. Similarly, bloggers and publishers need to work smarter too. Ask a 100 of them, how they’d increase their website revenues and 98 would give you advice to grow your traffic. Growing traffic is of course, a good suggestion but this is something which can take time and should be part of a long term strategy. The smarter way would be to realize the full potential of your current traffic first. Think Ad Revenue Optimization using Split Testing.

Lesson #2 – Keep looking for Treasures
Scrooge’s secondary occupation was Treasure hunting. So should yours be. Just like he never gave up finding new opportunities and kept looking for new treasures, optimization is also a continuous process and should never stop. This is important, especially for banner ads. You need to be sure that they are performing in the most optimized manner as banners in the wrong place develop banner blindness quickly, leading to lower click-through rate.

Number one dime

Lesson #3 – You need a Number one Dime
Remember how much Scrooge loved his number one dime, above everything else? He attributes all his success to that number one dime! Similarly, you need a number one dime too. In the Ad Revenue optimization world, this would your testing tool. Of course, you can test between various parameters (Ad location, size, type, theme, etc) manually and create a script to report results and then continue fine tuning … but this is only possible if you are very good technically, especially in client end scripting. Also, to properly optimize a website, you may have to create hundreds of variations and test continuously. So you can either make this your full time job or focus on what you already do well – managing your website. So, the need for an automated tool to test and optimize is so important , that I’m calling it the number one dime!

Lesson #4 – Every cent saved is money made
A dominant character trait in Scrooge was his thrift. Something which he clearly didn’t like was losing money. This is the reason why other Multi-arm bandit solutions (such as UCB1) are better than A/B Testing. They help you optimize the testing process! You don’t lose money while exploring/testing different variations as these algorithms send more traffic to the better performing variations, instead of a 50/50 split.

Lesson #5 – Patience
Scrooge knew how important it was to analyze everything before making decisions, which is why he would not jump to conclusions. Similarly, Statistical significance is essential to drive any meaningful observation from test results, especially if you are using A/B testing. Taking decisions too soon, on very little data to back up the results, is a bad decision and will most probably result in selecting a variation that may not necessarily perform well. You could read more about statistical significance in this post, by Avinash Kaushik.

Lesson #6 – Strict code of honor
Scrooge displayed a strict code of honor, insisting that the only valid way to acquire wealth is to “earn it square”. Similarly, publishers should ensure that they follow all the ad network’s program policies and should stay clear of using any black hat techniques to inflate ad clicks. Not only will it skew up the test statistics, but you also risk your account getting banned by the ad network and not being paid.

The character Scrooge McDuck is licensed by The Walt Disney Company. Feature image courtesy –