Financial Models

The Ad Network space has started growing a lot in recent years (2021). More people are consuming things where ads are being displayed. This 5-year startup financial model is designed to show the potential revenue/expenses/profit potential of starting up and operating an ad network.

This Excel template isn’t necessarily limited to just online sources. Ad networks exist all over the place i.e. billboards, advertisements on buses, benches, etc...This model is flexible enough to handle all of that logic. There are two participants in this type of network: advertisers (demand) and publishers (supply). In order to best drive how they may connect over time, the revenue assumptions focus on publishers and the percentage of their ad inventory they can fill over time. The ad network itself will then take a fee on that volume of connections made per a configurable percentage. Users can configure the following inputs across three different tiers of publishers over 5 years: Start Month, Starting Count, Average Monthly Growth, Average Monthly Impressions, Average Monthly Impression Growth, Average CPM for Publisher Impressions, % of Available Impressions Being Filled by Advertisers, Average Ad Revenue Share Percentage Retained by Network (fee rev.) General assumptions exist for the global definitions of the model, for example the start year, funding sources, startup costs, capex, debt service, and cash distributions. There is a DCF analysis as well as IRR and equity multiple displays. Plenty of 5-year visuals were also built so the final results can be seen easier. Fixed operating expenses exist and can be defined by a start month and monthly amount per year. Dynamic Cost of Goods Sold inputs are separated and defined in relation to network participant count. There is also a hard coded section for manually defining COGS in each year. Equity requirements will auto-populate based on the assumptions (initial investment less any debt funding plus operating burn).