How to Make More Money with Adsense

Online publishers or site owners that run Google Adsense ads are sometimes left with a blank ad space or are being served PSA (Public Service Announcements) ads as place holders, for which they are not getting any revenues.  The reason for this is that Google Adsense ads are contextual, so only ads Read the rest of this entry »

The Reality of Performance Based Branding

Display advertising figures are reaching new heights, exceeding £1 billion in the UK, according to a research published yesterday by IAB UK.  The top categories advertising in display are Finance and Consumer Goods, accounting for 15% share each. Read the rest of this entry »

How to make more money from advertising with Ad Networks

Online publishers, website and blog owners that incorporate ads on their websites keep looking for strategies to increase revenues from advertising on their site. The basic steps for doing so are to make sure you have
high quality content and that your site is easy to find, which in turn will send more traffic your way.  However, there are several more steps you could and should take in order to increase the revenues from advertising with ad networks and optimize your site for better performance of display ads.

  • Ad placement: where do you place ads on your site?  Things you should look at:
    • Above and below the fold spots – above the fold ads usually perform better, as they don’t require the user to scroll down the page in order to see the ad.
    • Home page vs. internal pages spots – if the layout of your home page is different than that of your internal pages, you need to examine the placement of the ads separately for these two layouts.  Typically internal pages tend to be more content-heavy, which may allow for more bottom half of the page ad spots, as users are likely to scroll down in order to read the content all the way to the end.
    • Traffic anchors – find traffic anchors on your site such as a video player or a lively forum section and place ads on or next to this anchor.  Use the reports from your ad network to see which content gets more views and where users tend to click more and place your ads in proximity to these areas.
  • Ad sizes: try different sizes and ad combinations, depending on the layout of your website, to determine whether there are specific ad sizes that work better for you.  It is best of course to experiment with IAB standard sizes for banners and rich media formats because this way you make it easier for advertisers and ad networks to work with your site, however if you find a non-standard ad format that generates good revenues, go for it!   As a rule of thumb though, above the fold ads in sizes 728*90 and 300*250 tend to yield better results.
  • Number of ads per page: more ads on page don’t equal more revenues.  Beyond maintaining a positive user experience of your site, you also need to consider the fact that a lower ads to content ratio makes the ads more visible, whereas loading up ads on the page may simply make them overlook the ads altogether.
    • How many ads per page: an optimal measure is to have up to 3 banner spots per page.  If you choose to have popup ads on your site, an appropriate measure would be 1 pop-up ad per user per day.
    • Vary the ad types: use fixed banners, dynamic banners (such as sliders) and other rich media ad formats – test different ad type combinations and see which one performs better.
  • Allow varied pricing models: online publishers usually prefer to work on a CPM basis.  You may want to test the performance of certain campaigns on a CPC or CPA model for campaigns that directly target your site’s audience – in cases of a tight fit between the advertiser’s target audience and your site visitors’ profile, CPA may prove to be a more profitable option than CPM.
  • Work with the right ad network:   many sites are more familiar with Google Adsense and opt to work with this network, however Google Adsense is based on contextual advertising.  If your site is not text-heavy, contextual advertising would be irrelevant and not maximize your revenue options.  A display ad network is a good Adsense alternative if your site focuses on video, games, social and other non-text-heavy content, or if you do not want to rely solely on contextual ads and wish to incorporate more advanced display ad formats.

There are several revenue increasing tactics that are directly related to the ad network you work with.

    • Fulfillment – you want to work with a network that can provide you 100% fulfillment of advertising spots.
    • Targeting and optimization – an ad network that knows your site and content should target the right (relevant!) advertisers to your site.  The more relevant the ads are to your visitors, the better they will perform.
    • Ad network reports: clear and insightful reports are essential to improve the monetization of your site.   Good performance and analytics reports will provide you with insights about the type of advertisers and campaigns that work best with your site, the ad sizes you should include or exclude from your pages based on performance, the differences in ad performance and revenues from your sites in different countries and languages, etc.

The strategies for making more money from advertising on your site are essentially a process of optimizing your website for revenues.  Since we at TLVMedia know our optimization inside out, we highly recommend you manage this process as any optimization process – test the various strategies, measure results and analyze the data to increase future revenues.

What is dCPM with a CPA target?

Dynamic cost per mille with a cost per action target. This model is the most effective and balanced both advertiser and publisher. In this model the advertiser continues to advertise as long as his eCPA is under his CPA goal, and the publisher decides to advertise as long as the CPM he receives is higher than the competing advertisers.  This is why neither the CPM nor the eCPA in this model is fixed. The following example describes the decision making process:

Day 1 Day 2 Day 3
Impressions 100,000 150,000 200,000
CPM $0.4 $0.5 $0.6
Leads 10 15 16
Cost 100*0.4 = $40 150*0.5=$75 200*0.6= $120
eCPA 40/10 = $4 75/15 = $5 120/16 = $7.5

Analysis: On day 1 the optimization process sees that the advertiser is profitable and even has a margin as he pays $4 for a $5 worth leads. This usually means that by driving more traffic, more leads can be obtained. On day 2, more leads have been obtained, advertising still paying under his target lead price. On day 3, even more traffic is being bought breaking the CPA limit of the advertiser. The optimization process decides to reduce traffic for the campaign.

Day 4 Day 40
Impressions 150,000 150,000
CPM 0.5 $0.3
Leads 15 5
Cost $75 $45
eCPA 75/15 = $5 $9

 

Analysis: The campaign maintains a good balance between the eCPA for the advertiser and the CPM for the publisher until day 40 where even at the price of $0.3 CPM the campaign is not effective anymore at an eCPA of $9.  Publisher cannot decrease the price since other advertisers bid more and advertiser is not profitable. The campaign is dropped.


 

 

Advantages

  • The advertiser is optimized toward paying according to results only.
  • The publisher does not advertise unless advertiser pays minimal price.
  • The banner will be shown for unlimited period and unlimited amount of time as long as being effective for both sides.
  • Good balance between advertiser’s risk and publisher’s profit.
  • Low vulnerability to frauds.
  • Allows the advertiser to compete over premium media with high CPM at low risk as long as his campaign is effective.
  • Campaign stops automatically.

Disadvantages

  • Advertiser has to risk an initial sum before seeing results.
  • Dependable on conversion tracking technology.

What is eCPA?

eCPA – effective cost per action.  We add an action count (Lead for instance) to the previous examples, and calculate how much did the advertiser actually paid for each Lead act. Lets assume the advertiser is profitable when he pays 5$ per lead.

 

eCPA on a CPL/CPA/CPS model

Here naturally, the eCPA is the predefined CPL.

Day 1 Day 2 Day 3
Impressions 200,000 150,000 200,000
CPL [fixed rate] $5 $5 $5
Leads 10 15 12
Cost $50 $75 $60
eCPM $0.4 $0.5 $0.3
eCPA [fixed rate] $5 $5 $5

Although the cost per Lead was as desired by the advertiser, the publisher might drop the campaign receiving only $0.3 eCPM on day 3.

eCPA on a CPM Model

In this case, the eCPA reflects the total cost each day divided by the number of leads.

We can see that the advertiser has very little control regarding the price he pays for each lead.

Day 1 Day 2 Day 3
Impressions 200,000 150,000 200,000
CPM [fixed rate] $0.5 $0.5 $0.5
Cost $100 $75 $100
Leads 10 15 12
eCPM [fixed rate] $0.5 $0.5 $0.5
eCPA 100/10 = $10 75/15 = $5 100/12 = $8.3

Here, the publisher might be satisfied with his 0.5$ CPM but the advertiser loses on day 1 and day 3 paying more than 5$ per lead dropping the campaign as well.


 

 

eCPA on a CPC Model

Similar to the CPM model, the eCPA reflects the total cost each day divided by the number of leads. Although sometimes there is some correlation between the number of clicks and the number of acquisitions, still the advertiser has little control over the price he pays for each lead.

Day 1 Day 2 Day 3
Impressions 200,000 150,000 150,000
Clicks 1000 1500 1000
CPC[fixed rate] $0.08 $0.08 $0.08
Cost $80 $120 $80
eCPM $0.4 $0.8 $0.53
Leads 10 15 12
eCPA 80/10 = $8 120/15 = $8 80/12 = $6.6

Although the publisher in this example receives satisfactory eCPMs, the advertiser is not profitable at $8 per lead.

What is CPL / CPA / CPS?

Cost Per Lead / Cost Per Acquisition / Cost Per Sale. In this model the advertiser pays explicitly per transaction type made by the buyer that resulted from a click on a banner impression.  Payment depends either on the cost of lead, cost of sale or a percentage of the sale’s revenue.  For example, a banner is being shown 200,000 times, and being clicked 1000 times. 10 clicks converted to a lead where the advertiser pays 5$ per lead. The total advertising cost would be 10*5 = 50$.

Advantages

  • The advertiser pays according to results only.
  • The banner will be shown for unlimited period of time.
  • Preferred model for the advertiser. Zero risk on his side.
  • Low vulnerability to frauds.
  • High correlation between sales and campaign and banner quality.

Disadvantages

  • Publisher will not allocate premium media for questionable profit
  • Publisher will refuse to work in this model when cpm / cpc models can fill his inventory
  • Dependable on conversion tracking technology and measurement.
  • Hard for the publisher to estimate when to stop a campaign
Day 1 Day 2 Day 3
Impressions 200,000 150,000 200,000
CPL [fixed rate] $5 $5 $5
Leads 10 15 12
Cost $50 $75 $60

Note: There are many other Cost Per Action models, like Cost per Call (for cellular advertising), Cost per Download (for downloadable products), Cost per View (a common term for video based advertising).  Advertisers who claim to support all available model sometimes use the term CPE – cost per everything.

What is CPC?

Cost Per Click. Known also as pay-per-click (PPC) from the publisher’s point of view. In this model the advertiser pays for each click made on a banner impression.  Payment depends on the number of clicks solely.  For example, a banner is being shown 200,000 times, and being clicked 1000 times at a cost of $0.08 per click.  The Click through rate – CTR in this case is 1000/200,000 = 0.5%. The cost to the advertiser would be $0.08 * 1000 = $80.  Since the advertiser paid $80 for 200,000 we say that his Effective CPM (or eCPM) is 80/200 = $0.4.

Advantages

  • The advertiser knows exactly how many times his landing page / site will be clicked, and what would be his daily / total costs.
  • The banner will be shown until enough clicks are being generated
  • Common model when looking for exposure with no direct lead or sale goals
  • CPC is optimized quiet fast by optimizing ad-networks to generate high CTR
  • Reasonable indicator for banner quality

Disadvantages

  • Weak correlation with Sales or Leads
  • Dependable on click tracking technology and measurement
  • Weak performance matrix, vulnerable to click frauds
  • No indication for campaign quality (only banner quality)
  • Advertiser might receive cheap media instead of effective media
  • Effective frequency capping is unknown

Example:

Day 1 Day 2 Day 3
Impressions 200,000 150,000 150,000
Clicks 1000 1500 1000
CPC[fixed rate] $0.08 $0.08 $0.08
Cost $80 $120 $80
eCPM $0.4 $0.8 $0.53

What is CPM?

Cost Per Mille. Usually reflects the price of 1000 banner impressions in dollar currency. Payment depends on the number of impressions solely.  For example, a banner is being shown 200,000 times at CPM of $0.5, means that the payment by the advertiser to the publisher would be 200,000 * 0.5 / 1000 = $100.

Advantages

  • The advertiser knows exactly how many times the banner will be shown, and what would be his daily / total costs.
  • Common model when buying media against a specific URL / site / ad spot.
  • CPM is being prioritized first by ad-networks since the publisher knows exactly what the expected revenue per impression is.

Disadvantages

  • Very weak performance matrix, very weak correlation with sales or leads.
  • No indications for the advertiser on banner, campaign or media quality.
  • When dealing with multiple sites or ad spots advertiser might receive cheap media instead of effective media.
  • Effective frequency capping is unknown.

Example:

Day 1 Day 2 Day 3
Impressions 200,000 150,000 200,000
CPM [fixed] $0.5 $0.5 $0.5
Cost $100 $75 $100

What is an ad-network and why do we need that?

Every on-line marketer is familiar with Google Adsense.  This platform enables publishers monetize their sites or blogs, by showing ads over their inventory or “ad-spot” or placements.  Google Adsense tries to monetize sites by implementing contextually relevant text ads.  Monetization of the site is usually done by PPC, payment per each click on a text banner.  This is a sample of a contextual ad-network, which includes many different advertisers as well as many different publishers.  The network role is to find the best match between the advertisers and the publishers.

What does “best match” mean?

This is one of the hardest question regarding ad-network optimization.   The  publisher goal might be maximal revenue, or maximal effective CPM for his traffic.  The advertiser usually doesn’t measure his goals by clicks,  rather by leads, sales or other matrices.  Another goal might be the ad-network revenue, which is actually working by revenue share, trying to keep both the revenue for the publisher optimal and the advertiser’s campaign effective.

So why are there so many ad-networks?

Adsense is a market leader in contextual  text-ads.  However, there are many reasons why there should be more than a single large ad-network:

* Adsense is contextual in nature. However, most of the Internet’s media today is actually not contextual. Whether its FaceBook, Youtube, a lyrics site or a flash game, google finds it difficult to monetize the property well.

* Not all ad-networks hold the same terms and condition.  For example, you are not allowed to show more than a few adsense banner in a single page.

* There are many different ad-formats: Banners, Pops, Interstitials, Richmedia and many others.  Some ad formats perform better the others. Some are considered more intrusive than others.

* Different Ad-networks hold different campaigns. Some networks can perform better than others depending on their campaigns.

* Finding the proper match between the audience, the campaigns, and the right ad-spot is a complicated technological task, which TLVMedia, among few others, is trying to solve.