Eli5: how do ads generate revenue?
In: 2
EDIT: reading the other replies, I’m inclined to think OP meant “how do they generate revenue for the platform that shows it” rather than for the company that makes it. I will, however, leave my answer just in case that’s what OP meant.
They don’t, not directly at least. The purpose of ads is to get people to buy your product or use your service. If that happens, your company makes money, and that is the ad generating revenue.
The exact amount of revenue generated by an ad can’t be accurately measured or even clearly defined. If I see your ad and buy your soft drink, you don’t know if that’s why I bought it unless I tell you (which is why many companies have a “how did you hear about us” question on their websites, for example). If my friend sees me drinking it and tries it because he thinks he may also like it but he’s never seen your ad, that revenue also came from the ad, albeit indirectly.
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