You’ve done it! You’ve made a blog, your content is witty, your friends all like what you post, you’re engaging social media to increase your traffic, and someone asks you, why not make a buck or two while you’re at it? I am going to dig into some of the key things you should know about advertising on your site.
There are a variety of ways to show ads on your website or blog, even more companies vying for your hard earned internet real estate (ad inventory), and even more companies still trying to make a quick buck as the display advertising dollars shift from more traditional media to new media sources. One thing to understand, the method of advertising I am speaking to is not in the vein of traditional advertising like in a newspaper where you solicit your favorite local shop to pay you a flat rate to show an ad for a finite amount of time. New advertising is dynamic and will show different ads on your site every time a page loads, this works to your advantage. Direct advertising, media buying/selling, and spot buys are all terms associated with more traditional ad sales. These types of relationships require the most effort on your part to solicit and maintain but can also be the most lucrative if you can set them up.
Putting ads on your site can be a daunting endeavor especially with the alphabet soup of terms you need to know just to make some basic educated decisions on how to move forward with new opportunities. CPA, CPM, CPC, CPL, RTB, PPC, SEO, SEM, ETC. ETC. ETC. it’s enough to drive a person bonkers! You want to be writing that original content that you signed up for not learning some new industry jargon. If you’ll take a moment to embrace a few concepts it will help your strategy immensely.
Page views and impressions are all important terms to understand when understanding online advertising. Every time someone lands on your page is considered a page view; be careful not to confuse this number with “uniques.” A unique user may view 5 pages on your site i.e., 1 unique can have many many page views. The ratio of unique users to page views on your site is one metric of determining how valuable your traffic may be (more on value in another post). Page views are what lead to ad requests or ad calls, synonyms for when someone lands on your page and if there is an advertiser present on the page the request for an ad to be shown in that location on the page where you specified. Fill rate is the number for the ratio between pages viewed and ad impressions shown. Ideally you want to fill every ad request with a displayed ad or ad impression.
Once a person has navigated to your artful hard work on your site, the page has loaded, you’ve got an ad tag on your page and an ad server is called. A LOT of stuff goes on behind the scenes within milliseconds, for the purposes of this article we’ll not dig in to this process right now. A variety of information is passed along in this server request that helps determine not only which ad to show but what the value of the ad to be shown will be. Real time bidding (RTB) as well as a traditional ad chain or waterfall is used to select the advertiser with the highest value for that ad request. Victory! An ad is selected based on all that criteria, an ad is shown, and you’ve just completed an ad impression. This means you make money if you’re using the CPM model of display advertising. Now that we’ve got the initial steps outlined let’s dig into some acronyms.
CPM stands for cost per mille or cost per thousand. For every 1000 impressions you will make $X. For publishers starting out in the advertising world, CPM is easiest method for starting to make money with your site due to the fact that all the hard work is being done by your ad provider (e.g. Lijit). Things to evaluate for ad partnerships are not only the dollars coming in but the experience and service you get from your partners. Having a real live person to email or get on the phone with about how to improve your revenue becomes exceedingly invaluable as you get more complex in your ad strategy. These types of ads can be lucrative for websites with very targeted content and someone at the helm that wants to take the time to try to set up campaigns that match the content of the site to improve the odds of an ad being clicked on, the effort falls on the publisher with this model. Other payment models include CPC (cost per click), which pays you every time someone clicks on the ad that is shown on your page. There are also CPA and CPL ads which stand for cost per action or cost per lead. These types of ads (or websites specifically devoted to the CPL model) require actual interaction from the person on your site to qualify. Often times a form being filled out and submitted determines success for a CPA/CPL ad. CPA/CPL are the most difficult to integrate into an ad strategy due to the amount work involved.
Lastly one other piece of the puzzle is the ad server. In most cases the early blogger or website will not necessarily need the services of a server for their site but it is important to understand why these exist. Ad servers allow the usage of multiple advertising partners for one ad zone (through the usage of default or passback tags) as well as the ability to control which advertising partner gets how many of your ad requests, segment your traffic by geography, and set pricing for each ad request.
Baby steps fearless blogger. This is the basic framework of what you need to know for display advertising on your site. Stay tuned for more 101 information in the coming Lijit blog posts.