How to Generate Advertising Revenues for Your Web Site

Your web site can be likened to a real estate property: every square inch counts. This realization has pushed banner advertising to the forefront as one of the avenues you can tap to generate revenues from your site. Consider these figures: Jupiter Communications reported that online advertising revenues will reach $7.3 billion, while eMarketer predicts an even higher figure of $9.5 billion in 2001. These figures are for U.S. online ad spending alone. Despite the downturn of the market, advertising spending on the Internet is still alive and well.

The question now is: how can your small online business get a share of that huge pie? You are not Yahoo, you're not Wall Street Journal, and you are not AOL. You do not have the kind of the traffic they have, the branding they have, and the clout they have. Worse, you will have to compete with these big boys to get a share of the billion-dollar advertising pie.

Whether your ad sales staff is one or 100, there are two ways to help you sell your advertising inventory and start earning advertising revenues for your site:

1. Join an advertising network. The main problem of a small site is the smaller quantity of ad impressions that it can serve. Let's say you generate 1,000 page views a day or 30,000 page views a month. Many ad sales representatives, who handle most of the ad buys for advertisers, will pass up your site because it isn't worth their time selling out your tiny inventory. Unless of course, your site attracts a specific kind of demographic that the advertiser specifically wants to reach. You need to remember that most banner ads are sold in huge lots of hundreds of thousands (if not millions) of impressions.

A solution is to join up with hundreds or thousands of other small sites like yours in what is called an advertising network. Advertising networks are organizations that aggregate Web sites that offer advertising space, and sell banner ads (and other advertising options) across them. A network operates under the thinking that there is power in numbers. If the network has 200 member sites similar to your traffic level (e.g. 30,000 page views a month), then the network can actually sell 6 million page views across the board. Given the higher number of impressions, the network can then negotiate for higher CPMs or CPCs from advertisers, thus benefiting member sites like yours.

Below are some of the advertising networks today. Study their requirements carefully, as well as their pay structure, the length of time before you receive your payment, accuracy of their statistics, kinds of advertisers they serve, and a host of other considerations. Note that some of the networks have tough guidelines and criteria for membership that a small business site may not be able to attain.

• ValueClick Media. With Fastclick now under its wings, Valueclick is one of the biggest banner advertising network today.
• Burst Media. This network is friendly to smaller sites, as it focuses on specialty and niche sites. They find the advertising for you, and you pay them a commission for each sale based on the length of your contract. Traffic requirement is smaller at a minimum of 5,000 monthly impressions, although it does not accept sites hosted by free page services. They specialize in remnant advertising.
• Advertising.com. One of the oldest advertising networks friendly to small web sites.
• Tribal Fusion. One of the new additions to the ad networks, what sets Tribal Fusion apart from the rest is that it is a pure CPM network (all campaigns are cost per impressions).
• DoubleClick. Now owned by Google. This is the granddaddy of advertising networks. Offers higher CPMs, but requires a minimum of 1 million impressions per month from member sites. However, it specializes in big advertisers and publishers and does not accept small sites.

2. Sell advertising for your site directly. This is admittedly a more difficult route for a small business site wanting to earn advertising revenues. But hey, as they say: "no pain, no gain!"

The first step is to target potential advertisers for your site. Make a list of sites that may potentially be interested in the kind of demographics your site serves. If your site focuses on work-at-home mothers, potential advertisers may include jewelry stores, fragrance sites, furniture sites, baby products and many others.

Tap your partner sites, or sites that you may have worked with in the past. Generally, advertisers with whom you have established previous business relationships, and are already familiar with your site and your audience are more likely to do media buys from you.

Know the right contact person. Visit their web site to see if they list the name of their marketing manager or media buyer. Or better yet, call up their office to check the name of the person responsible for buying ads for their site.

Oftentimes, big companies utilize advertising agencies to handle media buys for them. Some advertisers will refer you to their agencies. If you have already established a relationship with the advertiser, you can inform the agency that you have already discussed the potential media buy. If the advertiser has already expressed interest in an ad buy from your site, tell the agency about it.

If your first point of contact is the ad agency, request the media buyer's permission first before contacting the advertiser directly. There is nothing to gain from infuriating the media buyer.

Present your offer succinctly and clearly as soon as you make contact with either the advertiser directly or the media buyer. You can send an initial email message describing the range of online advertising available (e.g. whether sponsorships, banner buys, etc) and your advertising fees. Make sure that you emphasize the benefits the advertisers will reap with their exposure from your site. You can send the complete media kit (with your site description, demographics, traffic levels) once the potential advertiser has expressed interest in your site.

Tirelessly follow-up your advertising prospects, without being a pest. A day or two after sending your email message, call the person to discuss the potential ad buy and whether they need additional information. As soon as the ad buy is approved, you will be presented with an Insertion Order (IO) that specifies the commitments of each side guaranteed number of impressions (if any), make-good strategies if you fail to reach the guaranteed number, rates and billing instructions, who will be responsible for tracking statistics, cancellation policy, and other specifics of the ad buy. Carefully review the IO, checking whether you can really deliver what the contract entails. Remember, the goal is to establish a long-term relationship with the advertiser.

Soliciting advertising buyers for your site is a tedious task. However, the benefit of selling advertising directly is that you can negotiate a much higher CPM or sponsorship fees for your site. You don't have to settle with the miniscule $0.25 CPM rate the some advertising networks give. You can also negotiate a shorter payout rate: many ad networks pay only 45-90 days after the campaign ended. With you at the negotiating helm, you can require advertisers to pay-up before you install any of their banners, or immediately at the end of the campaign.

3. Participate in contextual advertising networks. Contextual advertising are text ads delivered based on the content of the web page using an automated system. The technology determines the content of the page, then serves ads that are targeted to the page's topic. For example, an article on website design will show ads of companies offering web site designs -- the idea being that ads targeted to the audience of the page will elicit greater response.

Contextual advertising providers strive to seamlessly integrate the ads with the content, some more so than others. Vibrant Media's Intellixt, for example, seeks to integrate the ads within the content of the page so well by highlighting keywords. Normally thought of as a hyperlink, a user who scrolls over these words is shown an overlib ad box up that contains the full ad text.

Some of the contextual advertising programs are currently offered by the following companies:

• Google Adsense https://www.google.com/adsense/
• Yahoo! Publishing Network (currently in beta and available to US publishers only) http://publisher.yahoo.com/
• Intellixt http://vibrantmedia.com/site/web_01a5.html
• Quigo Adsonar http://www.quigo.com/adsonarexchange.htm
• IndustryBrains http://www.industrybrains.com
• Kontera http://www.kontera.com
• Kanoodle Brightads http://www.kanoodle.com/about/brightads.html
• Clicksor http://www.clicksor.com/affiliate_programs.php
• Contextweb http://www.contextweb.com/
• Bidclix http://www.bidclix.com/
• Bidvertiser http://www.bidvertiser.com/

4. Sell your own advertising. You can also earn revenues by selling banner advertising and text ads yourself.

Unlike contextual advertising networks, you may not have the technology to serve ads based on the content of the page. You may also not have a wide pool of advertisers (mostly pay-per-click) competing and bidding for the premium spots in your site. Nonetheless, many websites have found that selling their own advertising, commonly labeled as "Sponsored Links" for text ads to be a lucrative income source.

Note, however, that potential advertisers will be looking for information on your site's reach and traffic, with some even considering your site's pagerank.

An important ingredient in selling your own ads is to have a capable and robust ad server that can handle ad management for you, allow the serving of various types of ads including banners, text ads, rich media and flash based advertising. It is also highly beneficial to use an ad server that will allow your advertisers to check in the status and performance of their campaigns.

Here are some advertising servers that you can check out:

• OpenX http://www.openx.org/ = a free open source ad serving tool.
• Google Ad Manager http://www.google.com/admanager = Recently introduced by Google, this ad serving tool is available to small and medium sized businesses. However, to date, the tool is available by invitation only but you can request an invite.