Advertising

An advertising business gives its product to users at no charge and sells access to their attention to third parties who want it.

The user is not the customer, which shapes every product decision: engagement, time spent, and targeting data become the operating priorities.

Advertisers pay per impression, per click, or per resulting action, with pricing set by auction in most large systems.

Revenue is a function of audience size, time spent, and how precisely the audience can be targeted — the last of which is under sustained regulatory and platform pressure.

• Daily and monthly active users
• Time spent per user
• Average revenue per user by geography
• Advertiser retention and spend concentration
• Fill rate and effective cost per thousand impressions

Strong advertising businesses show growing time spent per user, rising revenue per user, and a diversified advertiser base rather than dependence on a handful of spenders.

The healthiest have first-party data and direct user relationships, which insulate them from third-party targeting restrictions.

• Display and banner advertising
• Search advertising with intent-based auctions
• Sponsored content and native placements
• Retail media networks on commerce properties
• Connected television and streaming advertising

• How much revenue depends on third-party tracking?
• What is revenue per user, and how does it vary by market?
• How concentrated is spending among top advertisers?
• What happens to engagement if advertising load increases?
• How exposed is the business to a downturn in ad budgets?