Online advertising rate:
Online advertising rates are based on size, location, performance and market demand of the advertisement.
Size of the ad is one of the key features that will impact on the price of it, because in online advertising they sell the pixels. Next feature is ad location. Best place to put ads is above the scroll, though they will also work on the right, left and in the middle of the page, but it depends on the other content and layout of the site. Ad performance include: size, location and the quality of it. We can increase the performance of advert by targeting it. Such as: advertising a movie in online movie magazine. Market demand is one of the other features that will increase the price of the adverts. The more people want to buy something the price of the adverts can go up, because they are looking they will click on it or search for it.
How does a webmaster owner get the advert on their site?
In the past website owners had really difficult time for selling their adverts. They had to wait for an advertiser who would find their site and like it and contact them for more negotiation and signing a contract. But Google with its new advertising program "Google Adwords" changed this field. This program will make the opportunity for the website owners to increase the traffic of their site. they can search for the words that are related to the content of their page and they can pay for it, so whenever a user search for that specific word the advert of their site will appear in the SERP ( search engine result page). This program works on PPC model. Next step of this progress was creating "Google Adsense", with this program millions of site owners collaborate with each other and they install and show relevant Google ads in their sites. In this program both the publisher and Google will benefit and share the amount of money that they make from the advert.
Looking for a website that has the same content as your advert is the first step. Having a high range of traffic on their site will bring more clicks for you ads and it will guide users to you and makes your marketing work better. Then you can contact them and send them your ad and ask them to put it on their site. After negotiating on the price and the method of the advert you can have your ads on the site that you choose.
A person who wants to be an internet publisher in an advertising field has to pass pretty rigorous steps in order to get accepted from Ad networks. These processes differ from one network to other networks, but most of them are the same in some basic rules. At first they have to show their portfolio in internet marketing. They should have high traffic on their sites and if they had any background of working with CPA networks they can give the information to them. Some of the networks are more accurate and they will ask about their aim and purpose of the publisher to join the ad networks.
After they get the acceptance from the Ad network each of them depending on their platform will give you an electronic form that you can choose the URL of your site and then you can upload your advert and put it on your site. Some of the Ad networks prepare this process with just a few clicks.
Some examples of different online advertising:
Banner ads: banner ads or web banner is a form of online advertising delivered by an ad server. This kind of adverts are constructed by an image; it can be flash, GIF, animation, sound or video which will increase the viewer's attention. By clicking on the banner ads you will be guided to the page that is for the advertiser. Banner ads are wide and short or tall and narrow and most of the time they are placed on the pages with interesting content. For every user that clicks on the ads the affiliate earn money.
Examples of banner ads: http://inspirationfeed.com/inspiration/45-creative-advertising-banner-examples/
Rich media ads: in this way of advertising they use advance methods such as streaming videos, downloaded programs that interact immediately with the user. Also there are some ads that change when the user's mouse passes over it, these ads are also classified in rich media ads.
Example of rich media ads: http://www.cmgadvertising.com/client_demos/new_richmedia/shiner/Bock.html
Social network advertising: the adverts that are shown on social networking site such as facebook, MySpace, friendster, bebo, and many others are named social networking advertising. The benefit of this kind of adverts is that the advertiser can benefit from user's demographic information and target their ads appropriately.
Form of social network advertising:
- Direct advertising that is based on your network of friends: in this method they will use the information and action of your friends and show it on your page; such as facebook that for example shows you if friends have bought something form a shop. This can be really helpful to encourage people to buy something. Because most of the time people are affected from the action of their close group of friends.
- Direct Advertising placed on your social networking site: this is like traditional form of advertising but in social networks. The only different is that the social network can benefit from demographic information and they can target the ads and put the ads that are related to your interest based on your research and your actions on the net.
- Indirect Advertising by creating 'groups' or 'pages': this is the newest way of advertising. You can make a page or group for your business and people who are interested in your business, can like your page and you can also invite people to join your business and fallow your work on your page. This way of advertising can help you to increase the brand awareness and subscriber for your site.
Interstital ads: By adding this advert to your page, viewers will see a page of advert before seeing the main page. If they click on that page they will be guided to the page that is for the advert and also they can skip that ad and go to the main page.
This kind of advert also has count-down message on them so if the users don't click on them after a while they will auto-redirect to the main page.
Revenue from Sponsorship of site sections or content types (typically fixed fee for a period):
Companies can pay to the sites to have a section for their business. This kind of agreement is often struck for a fixed amount per year. It can be also a part of reciprocal arrangement where neither party pays.
This method was first used by Alex Tew in 2005. He earned $1,000,000 in 4 month when he set up his page based on this method. The page is divided into 100-pixel blocks (each measuring 10×10 pixels) of which there are 10,000 giving 1,000,000 pixels in total. He spent £50 on buying the domain name (www.milliondollarhomepage.com) and a basic web-hosting package. He designed the site himself but it began as a blank page.
How does the webmaster make money from the advert?
There are many methods in online advertising pricing system. Such as CPM, CPV, CPC, CPA, CPL, CPS, CPE. The most regular one in online advertising is CPM, CPC and CPA. The main focus of this part is to define each of these methods.
Definition of each method is from Wikipedia. [Online] Available at: <http://en.wikipedia.org/wiki/Online_advertising> [Accessed 14 March 2012].
"CPM (Cost Per Mille) or CPT (Cost Per Thousand Impressions) is when advertisers pay for exposure of their message to a specific audience."Per mille" means per thousand impressions, or loads of an advertisement." However, some impressions may not be counted, such as a reload or internal user action."
An example of computing the CPM:
Total cost for running the ad is $15,000.
The total audience is 2,400,000 people.
CPM is calculated as CPM = ($15,000/2,400,000)*1000 = $6.25
Selling a banner ad for $20 CPM in a website, it means that they spend that amount of money as a substitute to demonstrate the banner on 1000 pages view.
For the websites that have high page view with low CTR (click trough rate) such as blogs, the best way of advertising is using CPM ads." You can use CPM ads as an alternative to your Google Adsense Units. Google Adsense is really good but if your site doesn’t get a lot of ad clicks or the payout per click is really low then replacing the Adsense units with CPM ads could result in increased monthly ad revenue."
Tips And Tricks.[Online] Available at: < http://www.tipsandtricks-hq.com/which-cpm-ad-network-to-use-for-a-relatively-new-blog-1367 >[Accessed 14 March 2012].
"eCPM informs the publisher what they would have received if they sold the advertising inventory on a CPM basis by taking into account the Clickthrough rate (CTR) and/or Conversion rate (CVR) of the campaigns."
Wikipedia.[Online] Available at:http://en.wikipedia.org/wiki/Cost_per_impression [Accessed 14 march 2012].
Clickthrough rate (CTR)
In order to measure which advertising campaign achieved the best success in advertising on website they create a method which called Clickthrough Rate. This is the number of clicks on an ad divided by the number of times the ad is shown. For example, if a banner ad is delivered 100 times (100 impressions) and receives one click, then the clickthrough rate for the advertisement would be 1%.
Currently the CTR for the banner ads has decreased from 5% to 0.2% or 0.3%. The more similarity with the banner ads and the content of the site will help to increase this number. Sometimes having an unusual format of ads or flashy ads will help to increase this rate. But we have to keep this in mind that the disturbing adverts are avoided by the user.
There are two banners: "Super Apps" and "Fantastic Apps".
The publishers earn $1 per click.
Both banners were published for the duration of one week.
"Super Apps" was viewed by 2000 visitors from which 10 clicked on it.
"Fantastic Apps" was viewed by 2000 visitors from which 50 clicked on it.
This shows that:
"Super Apps" has an eCPM of $5 ($10/2000 * 1000)
"Fantastic Apps" has an eCPM of $25 ($50/2000 * 1000)
"CPV (Cost Per View) or (Cost Per Visitor) is when advertisers pay for each unique user view of an advertisement or website (usually used with pop-ups, pop-under and interstitial ads)."
Axverta Advertising. [Online] Available at: < http://axverta.com/aarevenuemodels.php> [Accessed 14 March 2012].
"CPC (Cost Per Click) or PPC (Pay per click) is when advertisers pay each 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. "
Axverta Advertising. [Online] Available at: <http://axverta.com/aarevenuemodels.php> [Accessed 14 March 2012].
In this method of advertising the advertiser will pay to have this right to be under the series of intention words that are related to their content and will bring lots of appropriate traffic to their site. So, when a user searches for the keywords which are related to their website, the advert of their site will come up, but they will only pay when users click on the advert and go through their page.
The cost of CPC depends on the website that is using it. It can be from 10p to $4, but sometimes in a specific category which is more important, such as life insurance companies it can be up to $40.
There are two models for PPC revenue model; flat-rate PPC and bid-based PPC.
Flat-rate PPC: in this model there is a fixed amount of money paid for each click and this price is something negotiable between the publisher and the advertiser. It depends on the place of the advert and the content of the page, the pages that have more worthy visitors and valuable traffic to their site will have a higher CPC and vice versa. Though, advertisers can discuss for lower charge, especially when committing to a long-term or high-value contract.
In this method the publisher or the advertising network will host a private auction for advertisers to rival with each other to have their advert on top. For each ad spot the advertiser inform the host of maximum amount that they want to pay for it. Each time when a visitor triggers the ad spot the auction take place and the advertiser who pays the maximum amount for it will show up first. When the advertisers bid on the specific keyword, the auction will take place whenever the visitor is searching for that word. The keyword that targets the searcher's geo-location, the day and time of the search, etc. are then compared and the winner determined. In cases that there are multiple winners their position on the SERP (Search Engine Result Page) depends on the amount each has bid. The more that they pay for the ads will help them to sit on the first level but also there are some additional factors such as quality and relevance of the advert.
"CPA (Cost Per Action or Cost Per Acquisition) or PPF (Pay Per Performance) 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 model ignores any inefficiency in the sellers web site conversion funnel. The following are common variants of CPA:"
Wikipedia.[Online] Available at: <http://en.wikipedia.org/wiki/Online_advertising> [Accessed 14 March 2012].
A."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."
Wikipedia.[Online] Available at: <http://en.wikipedia.org/wiki/Online_advertising> [Accessed 14 March 2012].
In this method the advertiser will only pay for some special lead that he/she would agree on it with the advertiser. These leads may be delivered electronically (such as emails or SMS) or it can be delivered by phone under the pay per call model. The advertisers won't pay any money if their lead doesn't deliver under the terms of the agreement.
Differences between CPA and CPL advertising
In CPL campaigns the advertiser control their brand and they decide to put the advert in which website and contact with the relevant publisher for promoting their advert. It means that it is advertiser-centric. On the other hand the CPA campaigns are publisher-centric in this case advertisers generally don't know where their offer is running and they cannot control where their advert is running and the publisher will browse offers and will choose which one to appear on their website.
The other difference between these two models is that, CPL campaigns are high volume and light-weight and customers only submit the contact information this can be their email address, but CPA campaigns are usually low volume and complex. In this case customer has to submit complex information such as credit card.
B." CPS (Cost Per Sale), PPS (Pay Per Sale), or CPO (Cost Per Order) advertising is based on each time a sale is made.
C. CPE (Cost Per Engagement) is a form of Cost Per Action pricing, 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."
Wikipedia.[Online] Available at: <http://en.wikipedia.org/wiki/Online_advertising> [Accessed 14 March 2012].
Calculate the CPA is: ads spend/ [number of impressions x CTR x CR]
Let's say that out of 20,000 impressions, you had a 5 percent click-through (CTR) to your landing (destination page) and 30 percent of those 5 percent convert to paying customers. The calculation is: $200/[20,000 x .05 x .30] = $0.67. That is, the cost per acquisition is $0.67.
"An online advertising network or ad network is a company that connects advertisers to web sites that want to host advertisements. The key function of an ad network is aggregation of ad space supply from publishers and matching it with advertiser demand."
Wikipedia.[Online] Available at: http://en.wikipedia.org/wiki/Advertising_network [Accessed 14 March 2012].
The basic distinction between online advertising and traditional advertising network is that online advertising uses Ad server in order to present the advertisement but in traditional advertising they use analog media for that purpose. The technology which serves in the place of advertisements on websites is ad serving. These companies supply software to the advertisers and websites to provide ads, count them, choosing the most appropriate ads for each website which can makes the most money for it, and examine improvement of different advertising campaigns.
Ad network is a collection of similar sites, so instead of being on one site you can purchase multiple sites that are relevant to your industry. You can also show up on a broad network. It will help you to expand your audience and review where your ad will appear and the quality and track results.
There are more than 250 advertising networks. We have to choose which ad network works for our website. The first point is that do they direct the desired audience to my website and do they target the audience to see my product?
Depending on your target you have to choose the one that is more appropriate for your advert.
Examples of ad networks: http://www.adnetworkdirectory.com/ad_networks/
Key function of advertising Networks:
The most important three key features that advertising networks should have is:
- Targeting Your Audience: in order to have a better result in advertising and have a specific audience, advertising networks will give you this option to target your audience, this can be targeting by keyword, location (country, region), age, etc.
- Tracking Features: although by targeting your ads you will be more specific on your audience but you can also track the viewers by visitor statistics, traffic sources, traffic audits, etc. This can help you to test your ads and make sure that they are successful or not.
- Fraud Prevention: in order to make sure that each Pound that you earn from adverts goes in to your pocket, every ad network will give some fraud prevention like proxy, click ring detection, and macro/bot prevention and detection. There are many scams that want to steal your traffic from your site and with this security system that they prepare for you, you can stop this.
Classifying Advertising networks:
Based on how these advertising networks are going to revenue, we can classify them in three most common groups; CPM, CPA, and PPC Ad networks. Depending on the traffic of your site and the way that users come to your site you have to choose the best ad network which is appropriate for you.If most of the traffic of your site is organic from search engines it's good to use CPC model. If you have visitors that they come to your site directly they will hardly ever click on CPC ads, so in this case it's better to use CPM model.
CPM is one of the most popular advertising models. Here are three top CPM advertising programs:
CPX, Value Click Media, Tribal Fusion, Technorati Media, and Burst Media.
Shout ME Loud.[Online] at: <http://www.shoutmeloud.com/5-cpm-advertising-programs-to-make-money-from-your-blog.html > [ Accessed 14 March 2012].
CPX "interactive is an ad network which provides ads in different size and types of advertisements like banner (468×60), leader board (728×90), Skyscraper, Pop-ups etc. You can select the one which suits your needs and blend with your blog layout. CPX interactive minimum payout is NET 30, $50 and they have 60% payout percentage."
CPX Interactive, [Online] Available at: < http://www.cpxinteractive.com/> [Accessed 14 March 2012].
Value Click Media "A CPM network which requires 3,000 impressions per month for getting the blog approved. Even they have different size and types of advertisements like CPX network. The minimum payout of Value Click Media is $25 and they pay through cheque and PayPal. Value click media is a good alternative for those who can’t get into tribal fusion or Technorati media."
Value Click Media, [Online] Available at: <http://www.valueclickmedia.com/> [Accessed 14 March 2012].
Tribal Fusion:" This network require minimum of 500,000 unique users per month. They are very strict. Apart from that, their minimum payout is $50 in net revenue. They pay you with check through mail. So far, Tribal fusion is one of the best CPM network available. Getting into Tribal fusion is the toughest of all. But if you get lucky enough, you can make huge income from Tribal fusion alone."
Tribal Fusion, [online] Available at: <http://www.tribalfusion.com/> [Accessed 14 March 2012].
In CPA ad networks they have to make sure that the publisher gets paid and are highly motivated. They play as a third party for advertisers and the publishers. They present more organized internet marketing strategies and use simple revenue engines which will help you make out the high level of income from your advertising.
Here are some examples for top CPA advertising networks:
PeerFly: "is a one-of-a-kind cost-per-action based affiliate ad network. Unlike other affiliate networks, our system is custom built from the ground up so we don't depend on unreliable hosted mechanics. We're currently accepting publishers from all countries, in any vertical. If you're here as a publisher you can start the registration process on the form to the right."
PeerFly, [Online] available at: < http://peerfly.com/?r=53435> [Accessed 14 March 2012].
Maxbounty: "MaxBounty features CPA offers like paid surveys, free gift cards, gambling, finance and more. Some offers allow incentivized traffic."
Max Bounty, [Online] Available at: <http://www.maxbounty.com/index.cfm?referer=92737> [Accessed 14 March 2012].
Neverblue : "Never Blue Ads are making friends fast amongst CPA affiliates with a great interface, stacks of exclusive CPA offers and killer affiliate incentives."
Neverblue ,[Online] Available at: <http://www.neverblue.com/signup?ref=aff_249120> [Accessed 14 March 2012].
Some example of top PPC ad networks:
Cogzidel Technologies, [Online] Available at: <http://www.cogzidel.com/blog/2009/09/top-10-ppc-ad-networks-to-make-money-online/ > [Accessed 14 March 2012].
Google adsense: Maximize revenue from online content Google AdSense is a free program that enables website publisher of all size to display relevant Google ads earn.
Yahoo Publisher Network: Simply display ads that are relevant to the content of your site and earn money from qualified clicks. No investment is required and setup is quick and easy.
Adbrite allows you to generate more revenue from your ad space.
- Customize ads to match your site
- Approve and reject ads for your site
- Works alongside other ad programs
Online advertising price:
Finding the right place for putting your ads is really important. There are many features that advertisers look for when they are going to choose a website to place their advert. It is important to have a clean and tidy page. Having clean layout with well organized ad spots will make your website stand out against your competitors who just slap many adverts without any ordering and thoughtfully placing for their site.
With the average size of the ads usual price for it is $1 for 2000 views. But this doesn't mean that you cannot change this price, but if you raise it too much then maybe you will decrease the amount of sales. In different situations if you decrease the price you will make less money than what you should be making.
In order to keep a good relation with your advertiser you shouldn't raise the price of their adverts too frequently, this will give them the message that the only thing important to you is making money out of them. This might put them off all together. The best way to increase your revenue from the ads of your site is to increase the traffic of your site.
buysellads, [blog]. Available at: <http://blog.buysellads.com/2010/12/how-to-price-and-place-your-ads/> [Accessed 14 March 2012].