Advertising as a revenue stream

http://jacquesmattheij.com/advertising+as+a+revenue+stream

by amirmc • 15 years ago

58 30 15 years ago

statictype2• 15 years ago

we've been blocked from using adsense on ww.com, there is no recourse for it so we don't even know why* we've been blocked, same on reocities.com*

Could this be because ww.com sounds like a domain squatter's site? I know that's not the case because I know of the person who runs it, but if I were to see that name without knowing who jacquesm is, I would be inclined to believe it belongs to a squatter.

Zakuzaa• 15 years ago

I didn't get you, how can a domain sound like a squatter's site?

statictype2• 15 years ago

Many people buy up misspellings of common domain names and try to monetize on typing mistakes. I guess squatting isn't the right word for that

DanielBMarkham2• 15 years ago

Good one, Jacques (assuming you're reading this)

People get caught up in all this ranting about MFA sites and they forget one important point: an ad is just another link as a resource that you can choose or not to put inside your content.

If I'm reading an article on how to carve pumpkins for Halloween, why wouldn't I want a chance to click over and see how much carving kits are at PumpkinCo? In fact, the author of the piece can make a guess as to what I might like, put some links in, then check to see if anybody is clicking them. In this way the ad is much more than a revenue generator: it's helping the content author determine what the intent of his readers are when viewing his site.

If I find that nobody clicks on PumpkinCo but lots of folks click on a knife shop, then I can eliminate the PumpkinCo ads, put in knife ads, and, more importantly, think about writing some more content around how to best choose a knife. After all, that's what people visiting the page are interested in. Each little change I make isn't so much focused on income as it is making the perfect experience for the person visiting my page.

Too often we think of web pages as something "we do" to the reader, as if it's some huge program that we create and the users are just little bits running around in it. (I know Jacques doesn't think this way, but some folks do). It's better to think of any sort of web content as a conversation: you do something, people come by, you measure and observe, then you respond to what they want. This is the very essence of A/B testing (which talks about this is purely analytical terms)

It's a damn-frustrating conversation, but in a way it's a hell of a lot cooler than email or IM. I can take a page over time and hone my message, adjust the graphics, add in ads, mix-in video, maybe add some interactivity -- all in an effort to create an extended multimedia conversation with some guy I will never meet and who may visit my site long after my death. To me that's pretty cool stuff.

skbohra123• 15 years ago

I apologize for accidental downvote, was trying to upvote, but bleh these small arrows.

andrewthornton2• 15 years ago

I may be naive, but isn't $1,000 per month for 100K unique impressions (as reported in the article) per day an insanely low price? Can anyone speak to how many ads run per month?

robryan• 15 years ago

It works out to $0.33 CPM, it really depends if the traffic on the site converts at all. Without having used it before I liken ww.com to a Facebook like place to post ads, users that are using a service that has nothing to really do with purchasing intent. Depending on who your targeting/ what your selling this CPM price cold be money down the drain on Facebook.

Of course the ww.com traffic could convert way better, I have no idea.

start123• 15 years ago

I agree, industry standard is around 5$ for every 1000 pageviews. The site could perhaps try out other ad platforms to better make use of its inventory

JonM3• 15 years ago

The "industry standard" will vary vastly with the vertical you operate in (sports, technology, barbie dolls) and quality of your site and audience

maurycy2• 15 years ago

The whole bias towards ads blows my mind.

Simply put, ads are about turning money into sales.

The history of the modern Internet is the history of more efficient ways to turn money into sales, to name a few like affiliate marketing, AdWords, social media, or Groupon.

It takes a very pessimistic bet on the innovation to seriously consider showing ads as a part of the business model.

EDIT: style

Swizec• 15 years ago

And the history of all media (TV, Radio, Newspapers etc.) is to take money away from the people who want to turn money into sales.

Now it just depends on whether you want to be a media website or a product website.

maurycy2• 15 years ago

As far as I know, the media is not able to take any money away. For some time, it was not possible to turn money into sales more effectively.

EDIT: style

demallien• 15 years ago

All media? No, I don't think so. Books, films, music, games, the list goes on. In fact it is only a quite small subset of media that have been able to successfully fund themselves through media.

pathik2• 15 years ago

I agree. $1000 per month for 3 million impressions translates to a ridiculously low CPM. You could triple the amount to $3000 per ad slot per month to get a respectable CPM of $1, and you would still get advertisers easily. You should definitely try it out.

andrewthornton2• 15 years ago

I am not sure of your background, but what would you consider a "normal" CPM for a general website that is not in a specialized vertical? I would think that CPM rates of $1.00 would still be pretty low and yet would create more revenue for WW.

pathik2• 15 years ago

Well, a 'normal' CPM for these kinds of display ads is whatever an advertiser is willing to pay, irrespective of the niche. I think he should experiment by bumping up the pricing and find the optimum point where his revenue is maximized.

rradu• 15 years ago

Depends on the quality of traffic. I have a high volume image site that gets about 20 million page views a month on which I earn about $1500. Users usually don't spend more than 5-6 seconds on each page, so each ad impression has a very small value.

yaix• 15 years ago

Personally, I would definitely not put AS units on a page that discusses my AS income. I'd consider it too risky (for the reason, see AS TOS).

thenomad2• 15 years ago

Interesting stuff.

My major problem with advertising is the old classic: as soon as your revenue comes from ads, your customers are not your users/viewers/readers, they're your advertisers. And that promotes a mentality that isn't very customer-friendly - even if you think you can steer against that, it has a tendancy to sneak in through the side window.

(I speak from experience here. It's easy to start thinking "Hmm, could we get an extra page view there?" instead of "Hmm, how can we make this better?")

There's a reason that HBO have a string of awesome, critically-acclaimed series. It's because they're very good at what they do. But I suspect the revenue model might also have something to do with it.

DanielBMarkham2• 15 years ago

I think you have a very good point.

I've found that whenever I start doing that, the reader experience suffers, and that causes ad revenue to go down. Of course, I create personalized content with my name on it, so I have a more personal relationship to my readers than an e-how would, I guess.

People keep wanting to split the income stream from the reader experience, and I just don't think that's possible. Sure, you might imagine you can do it, you might take a look at ad revenue and somehow think the reasons for it are separate from the feel of your content, but it never works that way.

This same false dichotomy is in place no matter what business you are in. There is always a conflict between watching the bottom line and simply doing things that make you or the customer feel good. Being able to balance these two things, it's the art of a good businessman, no? A good businessperson creates a multi-faceted work of art that maximizes customer value while still providing some kind of trade that allows the business to keep helping the customer.

I think if anything, the problem is that if you were running a coffee shop and physically met with your customers, you'd be a lot more sensitive to quality issues and understand where they fit in with your whole business model. But on the web, it's all sort of faceless, and that encourages thinking of people as abstractions to be manipulated. This type of thinking always loses when placed against better standards (but quite frankly it might take a decade or more for that to happen)

JonM3• 15 years ago

Good point, I think there is a balance though....

For example, on a site with only one advert per page, I don't think there is any harm in having a new page load rather than an ajax call (which arguably would be the better "user experience").

What shouldn't be encouraged is sending users "around the houses" to get an extra couple of advertising impressions.... which if we were honest is likely to floor the CTR anyway.

The key in most instances is making sure your page loads fast, and let your users get to what they want quickly.

stylejam• 15 years ago

Well, if you're choosing a suboptimal solution (a new page) over an optimal solution (the ajax call) there's definitely something wrong ... FWIW, I strongly believe that a worst UX will bring less conversions, but I don't have any data to bring.

corin_3• 15 years ago

I replied to you in a bigger comment covering other areas too, but would be interested to hear from you on whether what I said makes sense with regards to the focusing on advertisers rather than readers aspect.

corin_3• 15 years ago

The company I work for has a business model based solely around advertising. It's not 100% banner advertising, we run some bespoke campaigns (e.g. microsites) and do some events, but basically everything that isn't banner advertising is available to us because of the audience we have, and because we can promote it through banner adverts.

A few thoughts from our experience to some of the common concerns about advertising as a revenue stream. These are all based on our specific situation, so may not be applicable to everyone.

  It's too hard to make money, you need way too many users

All our brands are content sites, we have around 1.5m monthly uniques and 20m monthly pageviews - with around 700k registered accounts across the different sites. From this we don't have a problem making a profit.

We sell at decent CPM rates (as in, not crazy cheap - once we tried filling spare inventory with Google adverts, we got $70 for the impressions we could normally sell for 100x that), and we handle all sales internally, no agencies involved. For that we have one main guy, our Director of Sales, who's amazing, and then for bigger campaigns I and one other person will often get involved to help out.

  Because it is so hard to sell advertising yourself, that becomes the company focus

We have (I think) ten full time employees, and a few part timers as well. Between a few people, I'd say the total amount of time spent directly on the revenue side of the business (i.e. dealing with clients, making sales, and, for the bigger campaigns, then managing those) is the equivilent to two, maybe three, people working on it full time. That leaves us with plenty of work hours between the other people to deal with the business as a whole, technical issues and, most of all, content.

(Side note: we're not a content farm of any sort. Our sites are all based around video games or hardware, and they all started off as small community sites that were built up to have a good following.)

What helps with selling our own advertisements is connections. Because of our very specific audience, we have a good selection of regular clients ranging from smaller companies like Razer and Steelseries up to Activision Blizzard, MediaCom and Dell.

  Your users lose out because your focus is not on them, but on advertisers.
  (see thenomad's comment on this thread: http://news.ycombinator.com/item?id=2359089)

Editorial independance is very important to us, and we do our best not to blur the line between journalism and sales. We've never, for example, asked anyone to change what they write to suit us or a client, and never even felt the need to.

When it comes to the idea of chosing "how do we get more pageviews" over "how do we make this better", in our experience there's little or no difference. Obviously there are ways to add more page views simply by changing the structure of the site, for example multipage articles, but we feel that, if a change like that has a negative impact on users, then they'll be put off the site, and so it won't end up actually helping our pageview figures.

Actually, on one site we did implement multi-page articles, but only after a couple of years of not wanting to do it - and the reason we ultimately made the change? It kept being requested by users who didn't like seeing one huge wall of text.

Certainly in the case of content websites, if perhaps not others, pageviews is actually a very good indication of how the user experience is. If the quality and quantity of content is rising, so will the stats we care about, so it's win/win for both us and our users.

Edit: one more.

  Advertising is a dead model, it doesn't help anyone

Our model isn't to keep finding new people to waste money, most of our clients have been with us for some time, and stay with us because they keep seeing a good ROI with us.

And at the other end, the advertisments are often useful for users to. Because of their targetted nature, a lot of adverts are for products/services that a lot of our readers are interested in. And for the times and people for whom that isn't the case, our adverts are all standard sizes, fit nicely into the pages and are perfectly easy to ignore. We don't do roadblock adverts ("sorry, you have to look at this advert and wait ten seconds before you can see our content") or anything like that. Well, we do have some preroll adverts on videos that we serve (again, we sell them all ourselves, and use our custom video player to display them), but we keep them short and offer users the opportunity to skip right through them if they wish.

thenomad2• 15 years ago

I just checked your profile out - cool niche!

(Apologies for not responding sooner. Still figuring the HN interface out and didn't see your reply to me!)

I'm very much talking about tendancies here rather than absolutes. Certainly some very principled sites manage to keep their editorial courage - in the gaming community, for example, Zero Punctuation and Penny Arcade both run ads, and neither are afraid of pissing people off.

But it's a dichotomy I've always found uncomfortable and difficult to reconcile with when running sites myself, and I think a lot of people have the same problem - you're to be applauded for managing to steer a straight path, and I'm sure you've had to fight to do it.

(Indeed, you could view the entire content farming industry as a manifestation of the same problem - when your client isn't the person coming to your site for content, it's very easy to let the content slide.).

And even in your company, at the end of the day, if there's a strategic meeting about how to increase revenue (assuming you need to), the questions you'll be asking will tend toward discussing the advertisers' needs, not the readers' (except in as much as you'll be asking how you can increase views, of course). I know this is an impossible question to answer, but in similar situations I've always ended up wondering "How much better would our services have ended up if any revenue-focussed meeting centered on our users/readers rather than our advertisers?"

Incidentally, I'd strongly disagree that advertising is a dead model. And I agree that particularly in the gaming sector, it's possible to give users genuine value with some ads - my partner runs a gaming site and she's experimenting with the same model, with the same intention of giving users ads for things of value to them.

corin_3• 15 years ago

Actually it hasn't been hard for us to do it at all. I think once we had a complaint from a client about some of our editorial coverage of one of their products, and they were told that it wouldn't change, which lead to them taking up an additional campaign to promote that product.

It's never been a case of business and editorial staff fighting over it, if anything the business side of the company sees the importance of editorial independance even more than the journalists do.

Maybe the fact that our communities are extremely opinionated and wouldn't think twice about calling us out as soon as we do anything they don't like makes it easier for us, I'm not sure.

atgm• 15 years ago

> we've been blocked from using adsense on ww.com, there is no recourse for it, so we don't even know why we've been blocked, same on reocities.com

This seems to be a very common problem. I wonder how large of an issue it will be several years down the line if/when Google dominates the internet even more than it does now.

Advertising as a revenue stream

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