(This is the eighth in a series of postings about citizen media business issues. See the introduction here. All of these entries are considered to be in “beta” and will be revised and refined as they find a home on a more permanent area of the Center for Citizen Media web site. To that end, your comments, additional examples, and criticisms are welcome and will be invaluable contributions to this process.)
The most common way for a website to earn revenue is one of the most traditional forms of monetization: selling advertising space. This process has gotten much easier in recent years with the rise of ad networks like Google’s AdSense and AdBrite. The ease, scope, and effectiveness of ad networks may make them attractive for many citizen journalists, but they are not the only form of advertising available to you. Affiliate programs and merchandising are two other routes that may be even more profitable to use instead of (or alongside) ads from a network.
Once you determine what type of ads you’ll display, be sure to consider how your readers will see your ads (both in terms of effectiveness and the level of intrusiveness). Consider also how advertising may affect your journalistic integrity and your appearance of objectivity, as well as your legal obligation to disclose that you are being paid to promote or review a product, should you ever choose to engage in that kind of activity.
AD NETWORKS
Ad networks are companies that arrange many deals with many advertisers to display ads all over the internet. They are typically very easy to sign up for and implement and some even integrate automatically with certain blog-hosting sites. Blogger, for example, allows you to put an AdSense sidebar on your blog with a few clicks.
CPC vs. CPM
Ad networks make deals with advertisers on a Cost-Per-Click or Cost-Per-Thousand basis. These rates of payment are often abbreviated CPC and CPM (M being the Roman numeral for 1,000), respectively.
With CPC ads, which will probably be most common for smaller outfits, you are paid a certain amount each time somebody actually clicks on the ad. You are paid nothing just for displaying CPC ads, and whether or not the click results in a sale is irrelevant. Unless you use a network like CrispAds that uses a fixed amount per-click, you will be paid a percentage of whatever money the network has worked out with the advertiser.
CPM ads are just based on the traffic. If you get 20,000 hits and each visitor is shown 1 ad, you’re paid for 20 thousands. Obviously, CPM ads will only be attractive to owners of sites with heavy traffic or those with low content or keyword “profitability” (see next section).
Relevance and Keywords
Some networks like AdSense and Vibrant Media use a program to “crawl” the content of your page to find information for which it can display an appropriate ad. For example, if you have a post that mentions taxes, you may see an ad for tax software or services next to it.
Others, like CrispAds, rely on keywords you provide. The benefits of using keywords are reliability, consistency, and control. Ads based on keywords are static; they don’t change even when your content does. Perhaps the most important reason to use keywords is being able to assess and capitalize on “keyword profitability.” The idea of profitability in this sense refers to the likelihood that your typical readers would be interested in buying or learning more about the products associated with a given keyword (and thus the likelihood that they will click).
For example, if you write a technology blog, you may want to use the keyword “iPod.” Using this keyword would be attractive for at least three distinct reasons, all of which suggest more clicks or more revenue for your site:
- Because your readers are the sorts of people who care about music and technology, they are likely to want an iPod.
- iPods are items that many people shop for and buy online anyway (as opposed to, say, furniture).
- iPods are hot commodities. Sellers of products that exist in such highly competitive marketplaces often will pay higher ad rates.
On the other hand, unvarying keywords do not allow for an ad on the latest trend, movie, magazine, or service you just happen to write about that isn’t covered by your keywords. A crawler would find that text and may have an ad ready for it. If you take the same technology blog on location to a video gaming conference, it will probably start to attract video game search engine traffic. People who are reading for the video game content may be much more likely to click an ad that a crawler finds (perhaps relevant to a particular game or gaming console) than they would an ad for an iPod.
Note: Using the video game example, you may want to supplement your ads with a button for a user to actually purchase the discussed video game using a site like Amazon.com. That way you can bring in revenue either for the ad or for the sale. You can find more information on affiliate programs like that offered by Amazon in this earlier post.
Google AdSense
The biggest of the ad networks, Google AdSense utilizes Google’s searching (crawling) technology to display relevant ads based on the content it sees on a given page. After you sign up, you are given a wide range of ad types from which to choose. They vary based on format (text, image, or video) and size (horizontal banners, vertical “skyscrapers,” squares, etc.) Text ads are further customizable by configuring colors to match the layout of your site. AdSense then supplies you with JavaScript (a Web programming language) for you to copy and paste into your web site’s code. When a visitor accesses your page, the JavaScript searches your page, compares what it finds with the AdSense database of advertisements, and displays the contextually relevant ads it finds.
AdSense also offers “AdSense for search,” which takes the form of a Google search bar. When a user uses it to perform a Google search, you make money on the ads that are displayed alongside the search.
AdSense offers both CPC and CPM ads. Like other networks that offer CPM, in order to display any in that category your site must be approved (based on content and traffic) by the individual advertisers. Google does not publicize a flat percentage of revenue that it pays out, but it does make detailed statistics available to allow for you to determine when and how much money came from which ads.
While AdSense’s average payment per-click tends to be lower than that of other networks it has a higher click-through rate (the percentage of page visitors that click on an ad) due to the success of the crawler in displaying highly relevant ads.
CrispAds and Sponsorship
CrispAds is an advertising network specializing in blogs. Instead of using a crawler or search engine to select ads based on the current content of your website, you submit keywords when you sign up which determine the ads displayed.
CrispAds not only displays text ads based on your keywords, but also puts your page into its database of blogs for advertisers to consider for sponsorship. If a company’s marketing department decides that they like your blog, they can sponsor you for a month at a time, displaying their graphical ads in the same place where your text ads were (the code does not change).
Being sponsored directly by an advertiser has advantages and disadvantages. On the one hand, you set your own advertising rates and therefore have the opportunity to make more money with sponsored ads than you would otherwise (this is, of course, dependent on the size of your readership). On the other, while the individual sponsoring companies may take your keywords into consideration, CrispAds will no longer display ads based on your keywords once you have been sponsored. It is possible that the shuffled ads based on keyword may be more appealing or more relevant to your readers and therefore earn more clicks than the ads displayed by your sponsoring company.
For text ads and any ad for which you have not set the rate yourself, CrispAds pays out 70% of what they make from the advertiser. This appears to be the highest publicized rate of all the ad networks (tied with BlogAds), although CrispAds does not have quite the same size advertiser base as other networks, such as AdSense. With fewer ads to draw from, there may be less chance for variation and relevance.
One advantage of CrispAds is the ease of payouts. Whereas AdSense requires $100 to accrue in your account before sending payment, CrispAds will send any amount over $5 via PayPal.
BlogAds, Flat Rates, and Hives
One of the older networks, BlogAds, now operates on an invite-only system. This site is designed for blogs with focused content, accordingly requiring bloggers to describe their work by choosing no more than two categories (for example, “gossip” and “politics”). Advertisers targeting niche markets use these categories in combination with traffic statistics to choose particular blogs to sponsor.
Instead of CPC or CPM, BlogAds users charge for a fixed duration of time displaying ads from a particular marketer. Starting at a minimum of $10, a company can choose to buy a week, two weeks, a month, or three months worth of time for its text, image, or Flash ad (which go for more, but bloggers can choose to not offer).
You are supposed to have an invitation from another BlogAds user in order to sign up, but you can also send them an email describing your blog and expressing interest. If they see a demand for a site like yours, they will contact you. Just signing up/applying does not guarantee you an account, however. The ideal candidate has a sharp focus on one topic or community and a sizable readership (all of those listed currently claim at least 3,000 ad impressions/week).
While the number of categories you can select is limited, you may be a part of as many “hives” as you want. Hives are groups of similarly-themed blogs that cluster to provide a convenient way for advertisers to market to many sites at once instead of picking one at a time. They also exist to group around features that BlogAds categories may not cover (like “bargain ads” or “Oregon progressives”). Hives are run by individual users who may accept or deny applications for inclusion.
One of BlogAds’s major draws is its high payout rate. For every $10 an advertiser pays, the blogger collects 70%, whoever invited/referred the blogger gets 5%, if the ad was purchased through a hive then the hive administrator receives 5%, and BlogAds keeps the rest.
While not available to smaller outfits, BlogAds is an appealing choice both for its lucrative rates and, perhaps most notably, its simplicity.
Pheedo and RSS
Pheedo specializes in RSS text ads. Noticeably missing from several of the larger ad networks is the ability to display ads inside feeds. Pheedo capitalized on the resulting demand by using technology to place ads at the end of posts, appearing at intervals you define (i.e. after every post or every three posts). While focusing on RSS ads, Pheedo will also give you code to place on your regular blog pages as well. The on-site ads are less flexible than many others, but may be worth considering for the sake of ad consistency if you like Pheedo for RSS ads.
As opposed to using a crawler or keywords to select relevant ads, Pheedo allows you to browse and select exactly the ads you want to display. This process allows for greater precision, but it is time-consuming and assumes that you have a certain amount of marketing savvy and knowledge about your readers.
Pheedo pays out 65% of the revenue they make from advertisers.
Vibrant Media, IntelliTxt, and Inline Popovers
IntelliTxt, an advertising service designed by Vibrant Media, takes further the idea of keywords. Instead of using keywords you submit to gauge which ads should be displayed, it scans the text on your page for keywords advertisers have chosen. When it finds one, it double-underlines it and scripts it so that when a reader’s cursor moves over it, an advertisement (text, banner, video, or interactive) springs up.
While “inline popover” ads such as these may succeed in achieving a higher click-through-rate (the percentage of readers who click an ad), they are commonly seen as a nuisance not far removed from their pariah cousins, the popup ads. Some, like Engadget’s Ryan Block, declare them to be even worse because “at least [popups] can quickly be cleared out with an alt-F4 / Apple-W.”
One problem with these that you’ve probably experienced is encountered when trying to scroll up or down on a page that uses inline popovers. The ads that spring up due to inadvertent mouse rollovers block the text you want to read and sometimes even play distracting sound or video.
Most importantly, inline popovers blur the lines between advertising and content, therefore putting your journalistic integrity in jeopardy. Your readers should be able to expect that the words they’re reading have not been commercially influenced. People who aren’t vetted web surfers may not even consider double-underlined links as somehow separate from your own regularly-underlined hypertext. This could lead readers to feel deceived, thus resulting in decreased ad clicks and, most importantly, decreased readership. Perception of your site could further be hurt by people’s memories of unwanted inline linking being associated with (and abused by) adware/malware.
Yahoo Publisher Network and Adobe Acrobat
YPN, currently (still) in “beta,” offers contextual text ads very similar to those from AdSense. It also, like Pheedo, enables you to include ads in your RSS feeds. YPN is one of the larger ad networks and deserves attention, but the feature that makes it most unique right now is its recently announced integration with Acrobat PDF files. This, of course, allows you to offer good-looking PDF documents without losing ad revenue for content viewed offline.
AdBrite
AdBrite caters more to regular websites than blogs, but is compatible with both. In addition to text, banner, and inline popover ads, AdBrite offers some more unique (though often aggressive) formats including InVideo, BritePic, and full page interstitial ads.
InVideo and BritePic are services that place ads on the top of your displayed media files. Additionally, a menu is accessible on the bottom of each that allows for social media features. For example, the “share” button acts much like that found on YouTube videos. When someone displays the video on another web site, it links back to your page and all clicks on advertisements displayed are credited to you regardless of where it is posted.
Interstitial ads—or “intermissions” as AdBrite calls them—are full-page URL hijacks that display an ad from another site before redirecting back to your site. You have probably seen this type of ad in use on many popular sites like the New York Times or The Internet Movie Database. Typically it will work such that when a user attempts to access your web site (or clicks a link on your web page to another section of the site), a full-page advertisement takes over their browser with a small-print link to “skip this ad” or “continue to [your site’s name]” before the content they asked for appears. These ads are considered intrusive enough that many pop-up blockers have incorporated tools to filter them out and automatically jump to your destination page.
AdBrite doesn’t supply you with ads from a database, but rather facilitates transactions between you and advertisers. You tell them where on your page ads will go and, generally, how much you want for that real estate. Advertisers can then browse the different options and may choose your space for text or banner ads depending on which you are accepting. In most instances, the rates are determined by auction. Advertisers bid on your space and you are paid one cent more than the second highest bid. They also provide you with a “your ad here” image that gives potential advertisers a link right on your web site through which they can buy ad space.
You set the rates for all ads. Generally, the more intrusive the ad, the more it pays you. Accordingly, interstitial ads allow you to earn the most revenue. Bidding for interstitial ad space starts at one cent per view, as compared to banner ads, for which the bidding starts at ten cents per thousand displayed.
PRIVATE SPONSORS
While ad networks are by far the easiest way to make money from ads on your web site, the biggest profit margins come with private sponsors. This is the more traditional method of obtaining advertisers—getting them yourself. You might go about doing this by taking the statistics for your web site (site traffic, reader demographics, content, rankings on sites like Technorati and Alexa, etc.) to various companies, bringing along a detailed map of where you want the ads to go. By cutting out the ad network middleman, you have a lot more work to do, but you keep 100% of the revenue. Unfortunately, this is only going to be a viable option for those who already have a substantial readership. Companies with advertising budgets rarely give time to small sites. If you are just starting out or do not have a lot of traffic, an ad network is probably a better bet for you.
WARNINGS
Click Fraud
You may be tempted to click your own ads, launch a program to click them automatically, have your friends click the ads, or otherwise manipulate the advertising system to make more money. This is called “click fraud,” and should definitely not be attempted. When an ad is clicked by a person with no intention to buy the advertiser’s product, it still costs the advertiser money. Advertisers in turn become angry with the ad networks (or you, if you’re sponsored directly) and may take legal action for damages. Lane’s Gift and Collectibles, for example, sued Google for failing to filter out click fraud (see the final order about the settlement here). If you’re suspected of click fraud as a publisher, all of the ad networks have provisions to terminate your account and you may face legal action (Google successfully sued AdSense publisher Auction Experts, Inc for $75,000 in click fraud damages in 2003).
Integrity
Too much or inappropriate advertising is one of the biggest turn-offs on the web. Think about how likely you are to take seriously any site that bombards you with popups, tries to install mystery software, presents ads as if they were unbiased content, or showcases the ads more than the content. While a lot of people know that ads are what make great free content possible, they have less and less tolerance for pushy or intrusive tactics. They also know that if they don’t like what they see at one site, there are probably many alternatives.
It can be difficult to present your ads in such a way that they are profitable while at the same time maintaining or increasing your reader base and looking professional. You may need to work by trial and error, but striking a balance is possible.
SUGGESTIONS
- Don’t overdo it. Too many ads can make your look sloppy—or worse, greedy.
- Don’t use inline popover ads if you can help it. The threat to reader trust is too great.
- Don’t try to deceive or trick your readers into clicking or viewing an ad. Without their trust, your site is nothing.
- Don’t feel like ad space is your only means for revenue. Affiliate programs, merchandising, and donations are all worthwhile alternatives or supplements.
- Do experiment with placement and format of ads to strike a balance of profitability and aesthetics. If you cannot find this balance, err on the side of aesthetics and usability.
- Do think about what your readers would most like to see ads for. This usually results in the same answer to the question of “what are my readers most likely to click on?”
- Do remember that ads in RSS feeds, PDF files, videos, and images are pretty uncommon. Think about the extent to which you want to look different in that regard.
(Ryan McGrady is a new media graduate student at Emerson College where he is studying knowledge, identity, and ideas in the information age.)