Multiple Internet Streams of Income (MISI)
Online Advertising
Posted by BobMo • 2/04/09 • Subscribe to this Discussion [RSS]
Topics: Online Advertising
Discuss skill set on how to make money from online advertising - Google, DoubleClick, Yahoo, MSN, Adbrite
User Comments
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Background
The term online advertising refers to ads that are served via the Internet. Early online ads ran on dial-up services such as Prodigy, eventually coming to the World Wide Web in the mid-’90s as banner ads or graphical pictures embedded onto sites such as the Global Network Navigator (GNN) and HotWired. Rick Boyce, the director of business development at HotWired (the online arm of Wired magazine) at the time, helped push through the first banner ad campaigns in 1994, including the AT&T banner ad pictured here.
First Banner Ad.jpg
Early banner ad on HotWired
When advertising started to appear on the web, many people were upset that the Internet, which had been developed for military, governmental and educational purposes, would be commercialized. But what HotWired offered to advertisers was a way to track ad performance by "clickthrough rates, " literally counting the times that people clicked on ads. The web has long been hailed as the most trackable medium, especially compared to broadcast TV and radio, because the computer user’s trail of clicks can be tracked closely.
Over time, banner ads became less useful for advertisers as people tuned them out or sought software to block their delivery. This led to an arms race for people’s attention, as advertisers introduced more and more intrusive ads, from blinking banners to pop-up ads to "interstitials" that take over the screen. Advertisers also have branched out into various delivery methods, sending ads via email, through RSS news feeds, to mobile devices, or embedded into online audio and video, including podcasts.
Pay-Per-Click Ads
As advertisers started to push into more colorful, more multimedia "rich media ads" online, a surprisingly simple text ad started to make a huge impact. The idea started with the GoTo.com search engine, which listed search results depending on how companies bid for keywords. The advertisers only paid GoTo.com each time someone clicked through to their site, a system known as pay-per-click (PPC). Even though earlier attempts at commercializing search results had failed, GoTo.com was more successful because they started life as a commercial search engine. Eventually, the site changed its name to Overture and was bought by Yahoo in 2003 for $1.7 billion.
Google AdWords.jpg
Google AdWords demo
Meanwhile, Google made a crucial change to the PPC system when it launched its AdWords service in 2000, listing "sponsored links" next to search results. These simple ads consisted of a text headline, a couple short lines and a link, and they eventually proved to be a powerhouse for Google. These ads were successful for three important reasons: 1) They were tied to keywords, which meant that searchers were getting ads that were highly relevant to what they were searching for; 2) advertisers only paid for the times people clicked on the ads; and 3) the popular Google search engine drove huge amounts of traffic to these ads.
But Google had a problem: GoTo.com had patented these types of paid search placements. Eventually Google settled the patent claim with Yahoo, which owned Overture/GoTo, by issuing 2.7 million shares of stock for a perpetual license. Google later branched out and started serving up PPC ads on third-party sites such as online newspapers and blogs through the AdSense network, delivering ads depending on the content of the page, rather than from search results.
Problems have persisted with PPC ads, as some companies will buy keywords using trademarked terms or the name of rival firms in order to divert traffic to their own websites. So far, courts have sided with Google, allowing people to use trademarked terms in PPC ads as long as they are not posing as the rival company and confusing consumers.
The other problem with PPC ads is click fraud, with hackers or rival firms driving up the cost of ads by clicking repeatedly on ads. Google and other search engines downplay the cost of click fraud, but researchers estimate that 10% to 20% of clicks on PPC ads are fraudulent, costing advertisers from $500 million to $1 billion per year.
Measuring the Phenomenon
Over the past few years, online advertising has become a juggernaut, leading all other ad mediums in growth worldwide. Why? As more people get broadband Internet connections, they tend to spend more of their time online and less time with print publications, TV and radio. As the attention of the public shifts to the Internet, advertisers must follow them in order to keep reaching people.
Here are some recent facts, figures and projections for online advertising in the U.S. and around the globe:
> The Internet Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) found that Internet ad spending in the U.S. hit a new record high in the first quarter of 2007, at $4.9 billion, marking the 10th consecutive record quarter.
> In Europe, online ad spending nearly doubled in 2006 to 8 billion Euros, according to the IAB. Out of 13 countries covered, the UK brought in the most online ad money, with 39% of the total in Europe.
> In 2006, advertisers spent more money online in the UK (2 billion pounds) than in newspapers (1.9 billion pounds). In the second half of the year, Internet ad spending in Britain made up 12.4% of all ads sold, topping the global average of 5.8%.
> ZenithOptimedia predicted that worldwide online advertising revenues would outpace radio ad revenues by 2008.
> PwC predicts the U.S. online ad market will bring in $35.4 billion in 2011.
> PwC predicts Canada will have the highest compounded annual growth rate for online advertising of any country in the world, growing 23.5% each year for the next five years.
> Jefferies & Co. predicted global online ad revenues would surpass $60 billion by 2010.
> eMarketer found that Google, Yahoo, AOL and MSN took in 57.4% of all U.S. Internet ad money in 2006, a percentage it predicts will rise to 66.6% for 2007.
Despite all these rosy projections, it pays to remember that advertising is a cyclical business, and online advertising dropped like a lead balloon after the dot-com bust in 2000.
Challenges
As marketers fall over each other to reach the growing online audience, a host of challenges remain for them. Because online advertising is a new frontier, marketers often find themselves crossing ethical boundaries for users. Email advertising led to spam, or unsolicited email, which has almost ruined the email experience for many people. Advertisers also started using pop-up or pop-under ads that served an ad in a new browser window, forcing people to close the window and view the ad. That led to people using pop-up blocking software, now a standard feature in the Firefox and Intenet Explorer browsers.
Intellitxt.jpg
Vibrant Media demo
On the web, the line between editorial and advertising has been fuzzy, both on search engines and on news sites and blogs. A company called Vibrant Media serves up what it calls "in-text advertising" a double-underlined text link from within news stories or editorial content. When you click on the double-underlined word, it brings up an ad related to that phrase. Though that practice is controversial with readers, Vibrant says the number of publishers who use its network has gone up 90%.
Over in the blogosphere, a company called PayPerPost pays bloggers to write positive reviews of products. At first, the company did not require that bloggers explain that they were paid for the mentions, but later they gave in to complaints and required disclaimers. While many bloggers and blog readers were upset with the paid placements, PayPerPost recently received a $7 million round of funding.
Advertisers have had to worry about being associated with these types of ethically challenged ad methods online, along with adware and spyware companies that deliver ads via software that’s loaded onto unsuspecting people’s computers. In one example, ads sold by Yahoo in its search advertising network ended up being served through adware companies unbeknownst to the advertisers. So their ads showed up through adware companies that might have upset viewers -- not exactly a good forum for selling or promoting a product.
Advertisers also face the challenge of gauging just how many people have viewed online ads. Tracking ads online is a tricky proposition, despite the Internet’s claim to better trackability. The problem is that it’s difficult to gauge how many unique people are actually viewing an ad, versus the same people viewing the ad multiple times on different computers, or automated Internet spiders or bots that scour the web for search engines.
Innovation
As people stop clicking on banner ads and pay less attention to search-related text ads, marketers have tried out new ways to reach an increasingly saturated-by-advertising audience. Video ads play before you watch online videos on many mainstream news sites, and audio podcasts include ads read by the hosts. Advertisers are also considering ways to send relevant ads to mobile phones, though many people want to get free data or free calls in return for watching ads on cell phones.
To help advertisers target people with relevant ads, firms such as Revenue Science offer "behavioral ads" that are served according to your online browsing history. For instance, if you went onto travel sites looking for good air fares, and then you went to read a story at the Wall Street Journal Online, you would get a banner ad served at WSJ.com touting a travel deal. Though these services have raised privacy issues, even 50% of people who are sensitive about their personal privacy said they would like to get promotions and offers based on their interests and tastes, according to a study by the Ponemon Institute.
As more and more members of the group formerly known as the audience start creating their own media, advertisers have tried to harness that creative energy by asking them to make their own ads for products they love. That strategy worked well for Frito-Lay as it paid a pittance to run a user-generated ad for the last Super Bowl. But the strategy backfired for Chevy, when it asked users to create their own video ads for the Tahoe SUV and people used the platform to criticize the company for promoting gas-guzzling cars. -
Purchasing variations
The three most common ways in which online advertising is purchased are CPM, CPC, and CPA.
• CPM (Cost Per Impression) is where advertisers pay for exposure of their message to a specific audience. CPM costs are priced per thousand impressions. The M in the acronym is the Roman numeral for one thousand.
• CPV (Cost Per Visitor) or (Cost per View in the case of Pop Ups and Unders) is where advertisers pay for the delivery of a Targeted Visitor to the advertisers website.
• CPC (Cost Per Click) is also known as Pay per click (PPC). Advertisers pay every time a user clicks on their listing and is redirected to their website. They do not actually pay for the listing, but only when the listing is clicked on. This system allows advertising specialists to refine searches and gain information about their market. Under the Pay per click pricing system, advertisers pay for the right to be listed under a series of target rich words that direct relevant traffic to their website, and pay only when someone clicks on their listing which links directly to their website. CPC differs from CPV in that each click is paid for regardless of whether the user makes it to the target site.
• CPA (Cost Per Action) or (Cost Per Acquisition) advertising is performance based and is common in the affiliate marketing sector of the business. In this payment scheme, the publisher takes all the risk of running the ad, and the advertiser pays only for the amount of users who complete a transaction, such as a purchase or sign-up. This is the best type of rate to pay for banner advertisements and the worst type of rate to charge. Similarly, CPL (Cost Per Lead) advertising is identical to CPA advertising and is based on the user completing a form, registering for a newsletter or some other action that the merchant feels will lead to a sale. Also common, CPO (Cost Per Order) advertising is based on each time an order is transacted.
• Cost per conversion Describes the cost of acquiring a customer, typically calculated by dividing the total cost of an ad campaign by the number of conversions. The definition of "Conversion" varies depending on the situation: it is sometimes considered to be a lead, a sale, or a purchase.
• CPE (Cost Per Engagement) is a form of Cost Per Action pricing first introduced in March 2008. Differing from cost-per-impression or cost-per-click models, a CPE model means advertising impressions are free and advertisers pay only when a user engages with their specific ad unit. Engagement is defined as a user interacting with an ad in any number of ways.
Though, as seen above, the large majority of online advertising has a cost that is brought about by usage or interaction of an ad, there are a few other methods of advertising online that only require a one time payment. The Million Dollar Homepage is a very successful example of this. Visitors were able to pay $1 per pixel of advertising space and their advert would remain on the homepage for as long as the website exists with no extra costs.
• Floating ad: An ad which moves across the user’s screen or floats above the content.
• Expanding ad: An ad which changes size and which may alter the contents of the webpage.
• Polite ad: A method by which a large ad will be downloaded in smaller pieces to minimize the disruption of the content being viewed
• Wallpaper ad: An ad which changes the background of the page being viewed.
• Trick banner: A banner ad that looks like a dialog box with buttons. It simulates an error message or an alert.
• Pop-up: A new window which opens in front of the current one, displaying an advertisement, or entire webpage.
• Pop-under: Similar to a Pop-Up except that the window is loaded or sent behind the current window so that the user does not see it until they close one or more active windows.
• Video ad: similar to a banner ad, except that instead of a static or animated image, actual moving video clips are displayed.
• Map ad: text or graphics linked from, and appearing in or over, a location on an electronic map such as on Google Maps.
• Mobile ad: an SMS text or multi-media message sent to a cell phone.
In addition, ads containing streaming video or streaming audio are becoming very popular with advertisers. -
interesting infos..thanks for sharing -
subscribed to my email...have a great day..
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This is very useful, Bob. I'm wondering which PPC sites are best to sign up with. I'm currently affiliated with Google, Adbrite and Widgetbucks. I'd value your suggestions. Thanks.-
g Thankz ladies,
yeah, u already have some good PPC affiliate caden, may be you want to try something here
but if you think you want to go next level you might think of
# Google AdWords - The biggest and best for volume, traffic quality and user interface. However the most expensive.
Get started for only $5. .
# Yahoo! Search Marketing - First GoTo.com, then Overture, now Yahoo! Search Marketing. Both high volume and quality with a few bargains still around.
Click here for a FREE $25 credit coupon.
# MSN AdCenter - A newly emerging big player with lots of leverage, and arguably the best quality traffic. Look out for an amazing keyword research tool as part of the package.
# MIVA - One of the best, yet more underated PPC search engines.
Get a FREE $25 bonus on sign-up by clicking here..
# SearchFeed - Strong ROI with a reasonable search volume. Geo-targeting available with 11 countries you can specifically focus on.
# Marchex AdHere - Get new visitors to your site in just minutes with Marchex AdHere PPC.
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# ABCSearch - Solid targeting, decent traffic sources, and good customer service.
Use this link and they'll match your initial deposit up to $100.
# 7Search - A smaller search engine with good quality traffic. Good interface.
They claim better ROI than either Google or Yahoo! because of their high quality traffic sources.
# Search123 - One of the first PPC search engines. Cost effective with good support.
Fund with $50 and they'll give you $20 free. Click here.
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Woooops looks like the links is not there.....ok here and enjoy
Google AdWords
adwords.google.com/select/starter/Welcome
Yahoo! Search Marketing
sem.smallbusiness.yahoo.com/searchenginemarketing/onlinemarketing.php?o=USC... -
Microsoft adCenter
adcenter.microsoft.com/
Marchex AdHere
www.shareasale.com/r.cfm?B=59523&U=177038&M=10252
Searchfeed
home.searchfeed.com/rd/AdvertiserInfo.jsp?p=12429&trackID=X2184308405/ -
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How to Sell Ads on Your Site
Just about every web site owner has thought of a day when they will be able to harvest huge profits simply by putting other people's ads on their site. Put up your site, insert ads, and wait for the checks to arrive.
And why not?
TV pulls down billions, your local daily newspaper probably gobbles up 80% of the ad money spent in your town, and your favorite top five rated radio station practically prints money. Media earns. So why can't your web site get in on the media money frenzy, too?
While Internet advertising has been a bit slow to get started (banner ad rates aren't any higher than they were in 1996), online advertising is starting to show signs of real promise.
Optimistic predictions peg online ad sales topping $23.5 billion by 2005. That is even MORE than network TV earns. To make matters even more exciting for the small business owner, there don't seem to be many mammoth corporate sites running away with all the audience. Even Yahoo, the king of web traffic, is having problems keeping Wall Street happy.
What To Expect.
Most web sites ads are in the form of banners. Banner rates are based on how many visitors your site gets. Just like advertising on TV or print, rates are CPM (cost per thousand visitors). The CPM rate for banners has been at $35 for years.
I would be sloppy if I didn't also mention that a great many sites discount their rates if you ask. In reality, the average CPM rate (when you ask) is well below $35. This sort of thing isn't at all unusual in the media world. I once worked for a radio station that had a published rate of $75 per commercial. Most clients got their spots for just $30. One major supermarket who had a knack for negotiation was getting the same commercials for just $12.
One way to tell if a site isn't getting any advertisers is to note how many of their banners advertise their own site. Either they aren't getting anyone to buy their banner space or the rates are so low it is more profitable to advertise the company's own products.
When you publish your ad rates, try to keep them high. It's much easier to negotiate a lower rate than to raise low rates later on. Most media profits come from higher rates. When your unique visitor count goes up, raise your rates. When an important writer regularly sends you content, raise your rates.
Here's Who Can Place Ads On Your Site.
Fortunately, there are some very large and growing ad networks that bring thousands of everyday web sites together. These well organized packages of sites are very attractive to advertisers. Even for big companies, they are the way to go if you want to do an ad campaign on the Net without spending a month going from site to site setting up the deal.
Make your first stop at TheAdStop.com. They include how-to advice and a host of reviewed ad networks that can get you started.
eAds.com pays from a nickle to 20 cents per click and won't accept sites that get less than 100,000 impressions per month (an impression is when a visitor sees a banner).
A site that is highly focused on a specific topic of interest to a certain valuable audience will produce better results for banners. eAds will negotiate a special price for sites with banners getting more than 500 clicks per month.
What do other bloggers charge?
Like it or not, the Internet behaves like a giant market place, and all websites are subject to the laws of supply and demand. In other words, if you set a price that is significantly higher than the one used by other blogs on your niche, the advertisers will go somewhere else.
The first thing you should do, therefore, is to take a look on blogs that sell advertising space to evaluate what rates they are asking.
The format of the ad (e.g., 468×60, 120×600, 125×125) and the position (e.g., header, sidebar, footer, blended with content) are factors that will directly influence the final price, so in order to be consistent through out your research you should pick a format and position that is popular.
Among blogs selling direct advertising space the 125×125 button ad on top of the sidebar is arguably the most used format, and it should fit our research purpose.
Let’s see what popular blogs on the online marketing sphere are charging, for instance. If you visit the Advertising page of Copyblogger, you will find that the blog generates over 1,000,000 monthly page views, and a 125×125 spot on the sidebar costs $1,500. Divide $1,500 by 1,000 (remember that 1,000,000 is equal to 1,000 times 1,000 page views) and you get a CPM of $1,5.
Similarly, if you visit JohnChow you will find that the 125×125 button add costs $500 monthly, and the blog generates 300,000 page views. Again just do $500 divided by 300 and you get a CPM of $1,66.
As you can see a CPM of $1,5 for the 125×125 buttons is a good average. Even TechCrunch charges a similar rate ($10,000 for 6,5 million page views monthly, converting to a CPM of $1,53), so let’s keep that number as a starting point.
Adapting to your own situation
All the blogs mentioned are viewed as authorities on their niche, which affects how much advertisers are willing to pay to get exposed to their audiences. If your blog is new or if you are just beginning to experiment with direct advertising, therefore, you probably should start with a lower CPM.
Start asking a $0,5 CPM, for example, and as your blog grows and more advertisers come along you can gradually raise it. If you have a blog generating 100,000 monthly page views this would translate into $50 monthly for each 125×125 button placed on your sidebar.
If you are going to use other ad formats or position the ads on other locations of your website just estimate how these factors will affect the traffic that an advertiser will end up getting. Placing a 300×250 banner on the sidebar, for instance, is similar to having 4 125×125 ads, so you could charge 4 times the price of the 125×125 ad ($200 monthly if your blog generates 100,000 impressions, converting to a $2 CPM).
Similarly, increase the CPM if the ad is on the header or blended with the content, and decrease it if the ad will be displayed below the fold or on the footer.
Keep in mind that you should consider real page views for these evaluations. Most web stats programs and software tend to over estimate the traffic on your site. Google Analytics is usually the most reliable one. -
TTZ Media Network
This is my own ad network. It’s ideal for technology and shopping related sites. TTZ Media provides product based ads that are trigger by keywords. The ads show products that are based on the keywords entered and a list of online stores where the products can be purchased. A reader clicking on the product will be taken to the store offering the product for sale. Money is generated with a CPC model. A reader need only click on the banner and visit the advertiser in order for the site to make money. The reader does not have to purchase the product from the advertiser. CPC rates are based on product categories and number of clicks the affiliate can generate. Our tech/review site based affiliates realize eCPM as high as $12.
Sign up for TTZ Media
Performancing Ads
Make by bloggers for bloggers, Performancing Ads is the market place for the 125×125 ad button, which has slowly become the ad format of choice for bloggers who wants to make money online. Publishers enjoy a 60% revenue share and free placement in the Performancing Ads market place. They also offer a life time referral program that you’ll definitely want to get in on.
Sign up for Performancing Ads
Kontera ContentLink
Kontera ContentLink allows you to make money from advertising without giving up any current advertising spots. Their technology reads your post and turns certain words into an ad. The highlighted words are double underline and an ad pops up when you hover over it. Normally Kontera requires a site have a minimum 500,000 page views per month before being accepted into the program. However, I have a partnership with Kontera that will allow smaller blogs to use their ContentLink service.
Fill out the application and enter “John Chow Kontera partnership” into the Comments field. The application is sent to my personal account representative. He will approve you based on your blog content and not your traffic level. This is a great way to use a service that is normally only available to high traffic sites.
Sign up for Kontera
Pepperjam Network
Founded by my friend Kris Jones, Pepperjam Network represents an evolution in affiliate marketing. The creation of Pepperjam Network represents eight years of research and development and the combined ideas, feedback, and intelligence of hundreds of affiliate marketers and advertisers. Pepperjam Network offers a quick and easy way to get started in affiliate marketing with the pepperjamADS.
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Text Link Ads
Text Link Ads is one of my favorite ad networks. They help me make money online by selling those text links you see under “Featured Sites.” The links offer advertisers traffic and search engine benefits and readers don’t seem to mind them at all because they are not intrusive. Your link price is set by Text Link Ads and is based on Alexa, Google PageRank, number of RSS subscribers, and other factors.
Sign up for Text Link Ads
Bidvertiser
Bidvertiser, a CPC ad network that competes with Google AdSense. It main advantage over AdSense is its low $10 payout. You only need to make $10 in order to be paid. Big publishers wouldn’t care about this but for many small blogs that are still waiting to hit that magic $100 Google payout level, getting pay at a lower level is quite attractive.
Sign up for Bidvertiser
ReviewMe
ReviewMe is this blog’s biggest money maker, accounting for $2,400 of the $8,545.25 March income. ReviewMe allows advertisers to buy sponsored reviews on your blog. Review prices are based on your blog’s Alexa, Technorati and estimated RSS numbers. Publishers can set their own pricing if they don’t like the price ReviewMe set. Reviews can be positive or negative. The only requirement is the post must be at least 200 words long.
Sign up for ReviewMe
DealDotCom
DealDotCom offers a two-tier affiliate program. When you refer others to DealDotCom and they get a free account, they are marked in the system as having been referred by you. Anything that they buy will nets you a 35% commission. Unlike other affiliate programs that place a time limit your your commission (like AuctionAds’ 5% for 6 months), the DealDotCom commission is forever. That’s right, forever. It doesn’t matter if they buy something tomorrow, next week, or fifty years from now - you’re going to get paid. What’s more, anyone that they refer to DealDotCom goes on your second tier. Anything people on your second tier buy nets you a 15% commission, forever.
Sign up for DealDotCom
AzoogleAds
AzoogleAds is one of the largest performance-based online advertising networks in the world. They offers some of the best and highest paying affiliate deals in the industry. No matter what topic your blog covers, you can find a deal that matches your site. The payout range from $1 to over $100 per action. Affiliate marketing is one of this blog’s biggest moneymaker and AzoogleAds is one of the main networks we use.
Sign up for AzoogleAds
Market Leverage
Market Leverage is another large affiliate network with lots of exclusive offers. Every publisher is assigned his own affiliate manager that will work with him to get the most out of the program. From simple zip submit to high commission sales offer, Market Leverage has it all and they’re great people to work with.
Sign up for Market Leverage
OIOpublisher Direct
OIOpublisher Direct is a Wordpress Plugin that automates the ad buying process so you can concentrate on blogging instead of selling. With OIOpublisher direct, advertisers can order, pay for and upload their ads directly to your blog. The only thing you have to do is approve the ad. The script can be installed on an unlimited number of domains and also works with PayPal subscription.
You want to blog, you don’t want to sell ads. Let OIOpubliser Direct do the selling for you. The plugin cost $47 and it’s worth every penny. You should make it all back and more with your first sale.
Get OIOpublisher Direct
Do it and enjoy your earning
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