Model a Photo App's Yearly Ad Earnings From Users, Ad Load and Ad Prices

Estimate how much revenue a photo-sharing social media app earns from advertising. Decide the size of the app and the period you are estimating, build the estimate step by step, and explain whether your final figure is believable. ```hint Count ads before pricing them First work out how many ads an average user sees in a day. Then think about what an advertiser pays for one of those ads, and how much that price changes from one country to another. ``` ### Clarifying Questions - Is this a mature app with hundreds of millions of daily users, or a younger one that is still growing and shows few ads? - Should the estimate cover one year, and should it include every ad surface in the app (main feed, stories, short videos) or only the photo feed? - Where do most of the users live? Advertisers pay very different prices in different markets. - Do advertisers pay per impression, per click, per completed action such as an install or a purchase, or a mix of these? ### What a Strong Answer Covers - An equation linking daily users, ad impressions per user and the price of an impression, set up before any numbers. - Labeled round-number assumptions for usage, ad load and prices, with arithmetic that is easy to follow and correct. - Segmentation by market (and optionally by ad surface), because ad prices vary widely by region. - Correct handling of pricing models, putting click and action pricing on the same basis as impression pricing. - A sanity check against a second method or known benchmarks, and the sensitivity of the result to the largest assumptions. ### Follow-up Questions - Which single assumption moves your estimate the most, and what internal data would you use to pin it down? - The app adds a short-video feed where people spend more time. How would that change your estimate? - How would you estimate the same revenue starting from advertisers instead of from users?