Question of the Day: Banner ads

23 thoughts on “Question of the Day: Banner ads”

  1. I would go with adsense. They tend to be less obtrusive and more relevant to content on the page. I would say, after some time has passed and you have your traffic numbers figured out then you could more accurately come up with an amount to charge for banner ads. Otherwise, you don’t really know how much traffic your going to have and your numbers could be way off. Furthermore, potential advertisers may be unwilling to pay for advertising if they don’t know what kind of exposure there ads will get.}

  2. At the end of the day your primary goal should be solving problems for the users. And while you certainly need to monetize your traffic at some point you really shouldn’t be worrying about this right before launch. If your co-founders are the tech guys and you’re the “business guy” then you could add a lot more value to your business and your business plan by going out there and cutting strategic partnerships or co-branding deals before you launch.

    But if your question is less operational and more conceptual (i.e. “What should I put in the business plan to make it sound compelling?”) then your best bet is to simply find out what the average CPM rates are in your sector, say that you’ll eventually serve advertisements and then use those CPM rates along with traffic estimates to build your revenue projections.

    -W}

  3. I’ve heard everything from $5 to $25 CPM (i.e. cost for 1000 impressions).

    Also, as a startup, your job is to worry about attracting users mainly and not finding advertisers (at least in the beginning)… so, go with adsense until you have at least 100,000 visitors a month… then you could sell your own ads in addition to using adsense…

    in terms of clickthrough rates, I think 0.1%-1% of impressions is a reasonable number (depending on the type of ad – banner or flash, etc…)… in terms of cost per click… I’ve heard of everything from 10 cents to 15 dollars… very broad… sorry I can’t narrow it down further… but, if you want to be conservative, go with the lower end… i.e. 50 cents or so…

    maybe someone else could share some more figures… but, I think one possible way you could calculate potential revenues is as follows…being conservative…

    (# of visitors/month) * (5 pages views / visit)* (.5 cent /page view)…
    so… if you had 100,000 visitors a month, you could make 2500 dollars in revenue… obviously, if you put in ads other than banner ones, this number will be higher… also you could put ads from multiple sources in one page… this will also increase your revenue…

    you could tweak this a bit and assume 10 page view/visit and assume 2.5 cents for an impression if you put in more interactive ads…

    Aydin.}

  4. I should also say that I don’t earn any revenue from advertising on my website… we’re a mobile VoIP firm… but, my previous post comes from blogs i’ve read on the net…

    if anyone has more accurate figures, please let us know…

    Aydin.}

  5. I agree with the above commenters in that putting banners on your site should be the last thing you are thinking about. But, if you insist on having ads there from day 1, adsense is the fastest and easiest way to go.

    As a side note… When I hear blahsports… I don’t connect it with any positive thoughts. I would strongly recommend changing it to something more positive/fun.}

  6. You should avoid putting up banners when launching the site. The reaction to ads on sites is very negative a lot of the time, and will cause people not to bookmark or socially promote the site.

    Regarding CPM, unless you are a big property or have an extremely lucrative niche you should expect between $1-2 CPM at best.

    -Chris}

  7. I note that you are already carrying Goog Ads on your blog, which is a reasonable way to learn about the market.

    Banner advertisers spend money either in a blind spot market (where they don’t know where their ads will be served, with a few restrictions) or by placing ads on specific or targetted sites. Until you are big, you will only be able to place untargetted ads from the blind market on your site. These won’t make you rich.

    There are a number of companies which can help you here (e.g. DoubleClick).

    If you do get big, the key to maximising your CPMs is to target a strong niche which brands are interested in and then know a lot about your users.

    It is worth considering alternative revenue sources such as affiliate links to relevant shopfronts, as you are focussed on sports you might want to consider major sports retailers, many of whom will have affiliate links.

    Also consider contextual advertising such as this http://www.text-link-ads.com/

    It is worth checking our Wikipedia too http://en.wikipedia.org/wiki/Online_advertising.

    First step though – get 10s of thousands of active and loyal users.

    M.}

  8. The advice here is good. But I have to point out that making a business around CPM ads is probably not enough. Do the math – you need A LOT of loyal users to get enough CPM ad sales to be rich. Strong branded sites will target $150 CPM but in reality they don’t get list price, nor do they sell out.

    I think you will have a very hard time getting savvy investors to pony up on a CPM-based business unless you can prove amazing traffic levels.

    As a marketer, I believe less and less advertisers are spending on CPM banners. It’s OK for branding but for most marketing initiatives it has a soft ROI. CPC, CPA and lead generation have much higher revenue potential. Figure out how one of those models applies to your business.

    However, first and foremost, users are the key driver. First you must prove you can win them, second you need a plan to monetize them. See my post on developing a marketing strategy in FoundRead.

    Good luck.}

  9. I would say think think about the realities of what you’re about to do.
    Say you use Google ads from day 1, $1 CPM is probably optimistic? 50,000 impressions a month would be impressive anytime soon unless you have some awesome PR planned, and that means $50 a month. Worth it? I’d say no.
    With banner ads, you’d want to get a better CPM for these, but in reality who’d buy them when you are about to launch with no traffic?
    I am in the process of doing the same right now. Take the industry average less a little bit, put it in your business plan and see if it is a viable long term business. Assume zero revenue until your user projections get you to near the point you can achieve the average CPM. Make sure your investment covers you until then.
    Investors we have spoken to cared about two things:
    1) Our idea, and us (angel investor)
    2) Traffic (subsequent VCs).
    Focus on making your site awesome, and loved by your members.}

  10. I read “Niche” somewhere. if that is so, then you should be thinking of much better ways of leveraging your niche Traffic. Perhaps CPA or some actual revenue conversion should be the target. Besides since it is “Niche”, you are going to lose on the general traffic, so definitely the traffic numbers are going to be much lesser than some figures thrown in this thread.
    Besides this all holds good only if you do a good job at what you are suppose to to, ie your website and the content, 😉

    Best of Luck!!}

  11. I’m not quite sure I agree with the “no banner ad” policy from day one..

    You have to set a tone with your site, and if you plan to eventually offer banner and sponsorship opportunities, its better to get your users used to the idea from the get-go, instead of 6 months or a year later.

    I’ve been involved in sites where you build the userbase to a certain level, and as soon as you add a banner, your users begin to revolt. From many user perspectives, you are using them to make money.

    My view is to not clutter up your site with banners before you’ve gained an audience and content, but also don’t be afraid to set the expectation that your site is a commercial enterprise and is for making money.}

  12. First of all, thank you to everyone with their words of advice and luck!
    There are a few things that I would like to point out, I agree with John. If i were a user from day one and am used to a website being a certain way with a certain format, I would not be pleased at all to logon one day and find the site full of banners. I think the easiest way is to slowly introduce the user to your banners and always remember that those banners must not be intrusive or clustered! I think we all agree on that; banners bother the user but ad’s are a must if you website provides a free service…it is hard to balance both worlds.}

  13. It depends on what your long-term goal is. I run my own site and the point is to draw traffic that you can then monetize.

    We wanted to present a professional image – your site will ALWAYS be compared to a bigger one and the bigger ones don’t use Google AdWords.

    Nothing says ‘start-up’ or ‘strapped for cash’ like AdWords, and it isn’t the quickest to way to ad revenue as some would like to think.

    We sell our own banner ads – the companies come to us, AND we have a company that serves other ads for $4.80 cpm minimum guaranteed – but that comes AFTER you get traffic.

    Your job right now is to NOT put any ads at all – they aren’t going to make any money right now so why hurt the user experience at this stage?

    When your pageviews start approaching 2500 per day you can check out networks or ad auction sites to see what CPM you can get – but check the terms, they often pay Net-30 or Net-60 so you have to factor in that delay in receiving cash.

    Once companies start approaching you directly – we use an online form for advertisers to contact us and have had companies like Universal Records contact us through it – then you charge a MINIMUM of DOUBLE what the networks are paying you because that is closer to what they are charging.

    Our cpm rate is $15 but we chose a strong niche. I hope the advice from someone running their own site and handling the monetization strategy is helpful.}

  14. Sorry for the ?? my last post didn’t quite seem to err… work. (Why did you guys ditch your own CMS for wordpress? I liked yours better)…

    Don’t concearn yourself too much with banner space. Banners deliver brand recognition (if that)… they’re a tough sell and there’s far better ways you can spend your time and make money through your site than flogging that horse… make it someone else’s problem: Partner with a media placement agency.

    I run 3 portals, 1 is 24 months old and 2 are 12 months old – combined, they get about 100k of impressions per month – our media buyer sells space for about $30 PCM and do a damn good job selling out. They hunt down the clients, sell the space, take delivery of the professional designed banners and place them for you, track your stats and chase up the money. They charge a comission of 30% for their effort and pay in 90 days.

    The beautiful thing about this relationship is that they already have good report with the advertising agencies and can sell your space to the big-end of town right from the get-go.

    There’s a quantumn leap between a website covered in ads for online casinos and animated gifs for “Jon’s Mowing Service” and a site that presents with slick, professionally designed banners for respected, multi-national brands.

    And banners really are pretty useless marketing compared to the vast mountains of untapped gold that a well-executed website

  15. Sorry for the ?? my last post didn’t quite seem to err… work. (Why did you guys ditch your own CMS for wordpress? I liked yours better)…

    Don’t concearn yourself too much with banner space. Banners deliver brand recognition (if that)… they’re a tough sell and there’s far better ways you can spend your time and make money through your site than flogging that horse… make it someone else’s problem: Partner with a media placement agency.

    I run 3 portals, 1 is 24 months old and 2 are 12 months old – combined, they get about 100k of impressions per month – our media buyer sells space for about $30 PCM and do an incredible job. They hunt down the clients, sell the space, place your ads, track your stats and chase up the money. They charge a comission of 30% for their effort and pay in 90 days.

    The beautiful thing about this relationship is that they already have good report with the advertising agencies and can sell your space to the big-end of town right from the get-go.

    There’s a quantumn leap between a website covered in ads for online casinos, emoticons and animated gifs for “Jon’s Mowing Service” and a site that presents with slick, professionally designed banners for respected, multi-national brands.

    But even so… banners really are pretty useless marketing compared to the vast mountains of untapped gold a well-executed website will yeild from more carefully planned service delivery. For instance, our media buyer bust their hump selling banners which raise a couple of grand a month, of which they get 30% of, meanwhile our members pay us directly $1200 per month for access to our portals with membership growing rapidly and with practically no cold-calling / marketing effort whatsoever… simply because the products we sell work for them. This is where the money is, and ensuring you’re free to refine your website to strengthen the value it represents to your userbase is critical to success. You can’t effectivly do this while going door-to-door trying to flog website banners.

  16. Jesus, I’ve really made a mess of this thread… sorry for the multiposts up there. here I am singing the virtues of a well executed website. And I can barely use wordpress – who am I kidding 😉

  17. My website generates sixty million page views a month off of an average of 600k uniques and 1.1 million visits.

    We double in traffic each year.

    We have never done banner advertising (we are an online digital art and digital entertainment community made up of professionals from every major entertainment company like ea, sony, microsoft, nintendo, as well as people from all the art schools, and companies like ford motors, northrop grumman etc….

    Are we missing out on significant revenue? Most of our traffic is in our modified online forums. Our content is user generated and is very high quality, thus the high page views per visitor. It is also a loyal segment….age 14-34 year old males on average…educated…tech savvy…

    Are we making a mistake not selling cpm banners?

    any info is appreciated.

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