
Advertising as a revenue stream - amirmc
http://jacquesmattheij.com/advertising+as+a+revenue+stream
======
DanielBMarkham
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
I apologize for accidental downvote, was trying to upvote, but bleh these
small arrows.

------
thenomad
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.

~~~
JonM
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
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.

~~~
JonM
Suboptimal from what perspective? Server processing time & data transfer -
maybe, user experience - not necessarily.

Ajax calls aren't by more optimal by definition, it depends on the context.

Agree that worse UX will frustrate users making them less likely to spend time
on the site and have less interaction.

For the advertising that is sold on my site, the CPM is determined by the
number and quality of Unique Visitors and volume is determined by Page
Impressions.

So it's good to have a large number of page impressions, but actually I need
to build my audience (UVs) which is more difficult (to a point).

------
andrewthornton
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?

~~~
start123
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

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

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atgm
> 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.

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

~~~
statictype
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

~~~
allwein
Is this a misspelling of a common domain name? My first thought was "Wow, I
didn't know Jacques ran the Weight Watchers site!"

~~~
ido
I assume he was referring to "www".

------
yaix
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).

------
corin_
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.

~~~
thenomad
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_
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.

------
maurycy
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
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.

~~~
demallien
_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.

------
pathik
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.

~~~
andrewthornton
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.

~~~
pathik
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.

