Friday, July 31, 2009

Extra Tip: Image and Video Sites

If the website or pages that you’re analyzing for color choice focus on images or video, your visitors most likely disregard the accompanying text. Such pages usually yield lower volume of clicks and revenues with in-text ads. But it doesn’t mean that you can’t enjoy the extra income. For such web pages, try eye-catching colors that call for attention. While your visitors watch a video or an image, in-between the interesting parts, they’re usually looking for their next click. In such cases, the ad links should be easily identified and you shouldn’t worry too much about interrupting smooth reading (in most cases, your visitors don’t really read the entire text anyway). Make them shine.

Website Monetization Tip #2: Choosing the Text Ad’s Color

The Color of Money

The color of the ad links on your website’s pages has a significant impact on your potential revenues. When addressing the issue of the link’s format, I suggested that website publishers should make a clear distinction between the in-text ad links and other hyperlinks, preferably by using double underline format. This distinction may reduce clicks on the short term, but on the long term will improve your user experience and your bottom line revenues (read Tip #1). Choosing the right color for your ad links contributes to this distinction, but it has much more to it.

Attention without Interruption

The in text links appear within your content. They need to get a little attention from the reader, hinting that there’s an ad relevant to the highlighted term, subtly asking for permission from the reader. If she’s interested, she may hover with the mouse over the link, get some additional information, and then decide if she wants to click on the ad or continue reading. This permission process is essential to the success of the advertisement and of your website. But it’s not alone. Giving your website’s visitors the option to read smoothly through your content without interruption is crucial to your website’s user experience, which of course directly influences the usage and eventually earning patterns.

The color of the in text links should stand out from the text just enough to clearly present the link as an advertisement, but not too much, avoiding interruption to smooth reading.

Tasteful Design

The chosen color also needs to be part of the overall color pallet of the website. In other words, protect your tasteful design. In-text ads become part of the website’s general appearance and the color should match the surrounding environment. Now, there’s no magic matching formula. Some people like pink and brown together, others think it’s hideous. It is up to you – or your designer – to consider the general design of the website when choosing the ads’ color, not only money making considerations. Good design will contribute to the user experience and in the long term help building up your users’ satisfaction, which is crucial to your website and business.

Choosing your Color

And here’s the practical tip: choose quickly, and then choose again. And again. Yup, that’s the way. When you first integrate in-text, take a look at your website, and choose a color that you think would work. Don’t think too much, your guts can do this work for you. If you don’t like making such quick choices, simply stick with the default color that you get with the service. Then, give it a few days.

During this initial time, get some feedback. Ask your team, friends, visitors. Ask them specifically about the color, not a general question. And then, based on the feedback and your own taste, change the color. This should be very easy to do through your account with the in-text ads provider.

After you change the color, give it again a few days. Then, compare the statistics. In most cases, your in-text stats will provide you with a clear picture. Look for changes in the percentage of clicks out of your page impressions (click through rate, or CTR). Check the eCPM and bottom line revenues as well.

If there’s a change in the statistics, it would usually give you an answer about the right color for you. More money equals right color choice, in most cases. Attention: do give it a few days; testing for just one day may simply indicate visitors’ interest in the new color, not much more. If there’s no change in the statistics, then it’s up to your taste again. And if you’re still not sure, change the color again – it’s a click of a button and free of charge. And again. Until you find the right match, a color that gets you the clicks and revenues, matches your website’s overall appearance, but doesn’t interrupt smooth reading.

From Absence, through Protest, to Legitimacy – the Advertising Penetration Cycle

I generally dislike discussions about new media that start with ancient history and the development of the Internet in the sixties of the previous century. We’re beyond that. This said, however, there is much to learn from comparisons of the Internet’s evolvement with other media in the past. And if there is one clear pattern that repeated itself in all media – newspapers, radio, broadcast television, cable television, and lately the Internet – it is the penetration of advertising.

We’ve seen it before – from a medium where ads are not allowed, to organizations who protest against the appearance of first ads, and on to the understanding that advertising helps reduce the costs of media access to the general public, and therefore should be embraced under reasonable restrictions. From absence, through protest, to legitimacy – advertising penetrates all media.

This pattern was the same with when ads first appeared in newspapers, then with TV, then with the web, and it has also happened all over again with each new method of advertising in each of the media types. Whenever a new type of advertising appeared, it had to go through the same cycle – from early interest, through protests, and on to recognition and legitimacy. Instead of looking back deep into history books, the best example can be found by flipping back just a few pages: the introduction of ads on the email service from Google.

In its early days, Gmail was available by invitation only and when the ads showed up, the early adopters actually liked the idea of a free service financed by the exposure to ads (before that, except for maybe Hotmail, we had to pay for most good email services – remember that?). When Gmail started to spread, suddenly the ads surrounding the emails became the target of privacy organizations and concerned citizens. The new Big Brother is reading our personal correspondence! And then, a short few years later, it became the standard. The advertising within the email service from Google has become legitimate and millions of people and businesses use Gmail worldwide, enjoying a good free service sponsored by ads.

In Text Advertising is not different than other forms of advertising and it’s going through the same cycle. At first, as a new and exciting method, it was the talk of the day. The online leaders looked into it and the online giants Goolge, Microsoft and Yahoo all made early attempts with the technology. Then, it was shortly deemed intrusive. The same type of people who were once against ads on TV and then on Gmail found the new form of ads as “too much” because it rode on parts of the website’s content. If you keep reading, I will discuss the advantages of in text ads and show how in fact they are the least intrusive, but, as any new advertising method, in text advertising had to take some heat. And then, the protesting calmed down, and during 2008 and early 2009, in text ads became legitimate. From absence, through protest, to legitimacy – in text advertising now penetrates more and more websites.

CNN published an article (Feb 6th, 2009) about in-text advertising, calling it the “one bright spot in online advertising”, where I picked up an example to the penetration of advertising:

“It’s hard to imagine a news site like the New York Times (nytimes.com) signing on (to in-text ads) without some uproar from readers and staff. Then again, the newspaper recently decided to sell ads on its front page to attract more revenue. And that, too, was once unthinkable.”

And indeed, many other websites are already displaying in-text ads. Here are a few examples: Fox News, MSNBC, iVillage, JPost, BookRags, and eHow. Not convinced yet? Here are some more: esnips, The Hollywood Gossip, Ask The Builder, Money Control, Answer Bag, and so many more (by the way, I used examples of websites who have in-text ads from different providers, not only from my own work place).

By now, I can roughly estimate that over 100,000 websites have tried in text ads, including major websites with substantial traffic. This significant number means that most surfers have seen by now such an ad somewhere. It also means that in each vertical content category, at least a few sites have implemented in text ads, sowing the seeds of legitimacy that spreads on quickly.

On the other hand, despite being a large number, when looking at 100,000 websites out of over 150 million websites worldwide, it is still only a fraction. Take this fact, add the legitimacy factor, and multiple with the crazy fast growth rate, and boom – you get the phenomenal potential of in text advertising. I bet you that the Internet giants will join this party soon. In text advertising is on the verge of being everywhere online.

Look for the Bottom Line Revenues

Since eCPM can hide parts of the big picture, I recommend measuring your website revenues by the bottom line, in dollars (or your relevant currency). Don’t focus on eCPM only.

Look for an in-text ads solution that counts most of your traffic. While it is legitimate to filter out page views from areas with no ads, this is often stretched way too far to disqualify any visitor who is not from the USA. Such over-filtering will artificially increase your eCPM, but will also lower your bottom line revenues.

In the example above, if you’d managed increasing the fill rate from 40% to 70%, by finding a provider or a deal that does serve ads to international visitors and count your international traffic, your eCPM will seem to be lower, since the per-click payment in such locations is usually lower, but your bottom line revenues will be higher.

Hmmm… so the per-click payment (PPC) matters too? Of course. All parameters count. The eCPM, Net Impressions, CPC, CTR… Optimizing your website’s monetization takes some work, but this work pays off and at the end of the day, it helps you keep your visitors happy with better content and user experience. I will continue this discussion until getting to a formula that lets you calculate how much your website can earn you with in text ads. Next part will be about clicks…!

International Visitors could lead to Lost Revenues

To show how this geo-filtering can substantially affect your earnings, let’s continue with the same example but this time assume that out of the 100,000 page views, 40,000 were from the US while 60,000 were from Australia and Malaysia; and assume that your in-text provider doesn’t serve ads for visitors from Australia and Malaysia. In such case, your net impressions will be only 40,000 (40% fill rate) and you will earn only 40 times $5 = $200, instead of 100 times $5 = $500.

When your provider reports calculate eCPM, you will see $200 divided by 40,000, divided by 1,000, which equals $5, so it would seem as if you have a relatively high eCPM of $5 as you expected. But if you calculate your actual eCPM with your real number page views, it will look grim: $200 divided by 100,000, divided by 1,000, which equals only $2 eCPM. This shows how comparing eCPM figures without analysis could be deceiving.

Where did my Impressions Go? Abroad!

What decreases the fill rate? Where do those precious page views go with your money? Your ads provider won’t count pages that didn’t have ads on them. A legitimate reason can be that the visitor left so fast, that the hit on the server occurred, but the page didn’t complete to load all content and advertising scripts. Another reason can be that the page wasn’t suitable for the ads – it may have had too little text to actually highlight in-text ads or the content could have been in breach of terms (for instance, included adult oriented content where this was prohibited by the provider). All this happens and explains why fill rate are never 100%. Some page views are not actual net impressions.

The main reason for loss of page views, however, lies elsewhere, in geography. When advertisers purchase online campaigns they use geo-targeting, to determine where they want their ads to show up; this can be set according to the IP address mapping. Your in-text ads provider may not serve ads for certain locations – cities, areas, countries, and even whole continents. In such cases, page views from such locations where the provider didn’t show ads will not be counted as part of your relevant page views, or impressions, and will not be paid for.

Start with Impressions, Net Impressions

You know how many page views your website gets every day. Most likely, you use Google Analytics or another web analytics service or software; you may even be analyzing the hits on your servers. But this number will be different than the page views counted by your ads provider. Why? Notice that when calculating eCPM, we used the term “relevant page views”, also known as “impressions”. As the term implies, impressions are incidents when a visitor was exposed to the ads. Not all page views actually manage presenting ads to the visitor and therefore not all them are counted as impressions.

The ratio between these relevant impressions (or net impressions) and the actual number of page views is sometimes called “fill rate”, so that if you had 100,000 page views, but only 70,000 of them were net impressions, the fill rate was 70%. Since the higher the number of impressions, the higher the eCPM, then clearly you should aim for a high fill rate.

Breaking Down eCPM

Most often, online revenues are measured in eCPM – effective Cost Per Mille (thousand) is the original term, and as expected, it can be highly misleading, so let’s linger with it for a paragraph. This acronym simply stands for your bottom line revenues divided by your relevant page views, and then divided by 1,000, all in the relevant currency. Why divided by 1,000, you ask? Because the actual number was too low. Dividing the page views helped making the number higher and this way more comfortable, but also much more confusing…

For example, if your website had yesterday 20,000 relevant page views and yielded $100, your eCPM was $100 / (20,000 / 1,000) = $5. If you keep a stable average eCPM of $5 and stable traffic of average 20,000 page views daily, your website has a potential of $3,000 monthly revenues (this is by multiplying $5 by your monthly page views divided by 1,000). So why is calculating the potential revenues so complicated? Because every one of these eCPM factors can vary widely according to your website’s circumstances.

How much Money can I earn with In Text ads on my Website? Part 1

Calculating Potential In Text Ads Revenues

This is the most frequent question I get from website publishers before they integrate in-text ads for the first time. Fine, they say, we understand that they’re fast, relevant, subtle, don’t take place or require changes, but from the monetization point of view – how much can we earn from in-text ads? I wish I could answer this with a number, for example, $12,430 per month, but it’s not that simple. I can answer, however, with some rules and a simple formula to calculate your website’s potential in-text revenues. It would take some basic terminology clarifications and some further analysis, but bear with me, and I promise a formula you can easily use.

Tuesday, July 14, 2009

Google Adsense

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