Eli5: how do ads generate revenue?

Question

Eli5: how do ads generate revenue?

In: 2

Answer 1

You have a small business. Someone tells you that a $1000 ad on local TV will increase your profits for the month by at least $2000. You try it, and it works. You earned two extra dollars for each one you spent.

So you keep doing it.

Same concept applies to other kinds of advertising, though there are many complex variations.