Some ad networks crank cash by refreshing ads at a set interval. I call this sneaky, they call it a business model. Either way, this is how it works.
Let’s say I am an ad network and you are a publisher. I offer you a deal for 100,000 impressions per day at $1.50 CPM with 100% fill.
100,000 x $1.50/1000 = $150 per day
To make this a profitable propisition, my ad network needs to get paid more than $150 for those impressions. The problem is that I don’t know in advance how valuable those visitors will be. Your website might have bad traffic that’s only worth $110. How can I turn $110 into $150? Easy, I will show multiple ads, but only pay you for the first one.
To break even, I need to show 1.36 ads per paid impression.
$150 / $110 = 1.36
If I refresh my ads every minute. This is 100% invisible to you, the publisher. You might notice ads refreshing, but the refresh code is not on your website or in your ad server. It’s controlled entirely by my ad network, likely residing in an iframe. If you’ve got a web developer on staff, they can likely dig in and discover the refresh code.
Let’s say the average visit to your site lasts 3.5 minutes. So I get to show 3 ads in that time, each at the true CPM for your traffic, $1.10. For the ad network, this is great. I make $1.80 CPM profit and margin is:
($3.30 - $1.50) / $3.30 = 55%
This technique isn’t purely a money grab by the ad networks. Showing multiple ads with a timer also serves to smooth out price fluctuations. If the value of your traffic declines from $1.10 to $0.50, my ad network still breaks even on the deal.