7 Innovative Tactics to Increase Your Site's Ad Sales Revenues

by Kamau Austin

It is both incredulous and understandable that many successful web publishers (in terms of building web traffic) have little or no regular advertising revenue based on their site's traffic. Incredulous, because in other forms of media, publishers are paid advertising on a cost per thousand basis (CPM). Understandable, because most web publishers do not come out of traditional publishing backgrounds and therefore, do not fully understand how advertising is sold. 

While some web publishers make meager revenue from the so called "pay for performance" advertising programs, and endeavor to increase their traffic using banner exchanges, most make no ad fees based on their site's traffic, impressions, or unique visitors. This has resulted in high quality, but under financed, web publications vulnerable to the whims of opportunistic marketers who are getting a free ride in developing their brands and promoting their businesses.

I am familiar with some web publishers who receive tens of thousands and even millions of unique visitors a month, with no significant CPM advertising revenue. If you are a successful publisher in terms of your site's traffic (10 thousand unique visitors a month or more), you should be able to target a niche market of businesses that would like to reach your site visitors, and therefore, sell significant advertising. I know of many small print publications with readerships of only 10,000 - 15,000 subscribers, who do hundreds of thousands of dollars in ad sales revenue a year, and even get some major corporate sponsors. While in contrast, a web publisher with similar numbers in terms of site traffic, will lament how hard it is for a web publication to get ad sales revenue based on CPM. With a seven-year background as a media sales rep, I can attest to the fact, that it is a challenge to sell advertising for any media. Selling advertising takes a lot of time, canvassing, cold calling, focus, and closing skills. This article is written from the vantage point of helping web publishers become more competitive when selling their media's advertising inventory over against other forms of traditional media. 

The benefits far out weigh the sacrifice in terms of the time and effort spent in cultivating advertising revenue. A fairly successful web publisher could generate 6 figures in ad sales revenue, if they would focus on small business advertisers, as over looked sources of revenue. Lets explore 7 ways you can begin to explore if CPM based advertising can work for your web site. First, lets quickly examine advertising on the web.

Many pundits like Dr. Jacob Neilson www.useit.com, question whether advertising on the web has a future at all. However, according to Emarketer (based on research from auditing firm Pricewaterhouse Coopers and commissioned by the Interactive Advertising Bureau (IAB), Internet advertising today is a 7.3 billion dollar industry, that is projected to grow to 13.5 billion by 2005. Conversely speaking, the Internet advertising industry is growing faster than any other form of traditional media at about 13% this year. According to Emarketer, sources like The Myers Group, Zenith Optimedia, and Pricewaterhouse Coopers - all posit figures, that Internet advertising is at the head of the advertising growth curve. 

There are many reasons companies advertise. For the purposes of this article we will only mention a few, and for our purposes only focus on one. Major Corporations will basically only want to pay the mega-sites (i.e. Yahoo, AOL, Ebay, MSN, etc.,) for CPM based advertising. They are looking to reach mass markets of hundreds of millions of web surfers. Therefore, in most cases, major corporations should not be the focus of your advertising sales efforts, unless you own a mega-site (or at least one that receives a million unique visitors a month). Major corporations, may be receptive to a smaller site if it can sponsor a major event or section of the site that will increase its image, goodwill, or brand. Usually, your site will have to have partnerships with major publications, as media sponsors, before they give you any serious consideration. It takes at least 6 months to a year to cultivate and close any corporate ad sales.

Given the challenging dynamics of selling to major corporations that we alluded to earlier, small businesses should be the main focus of the average web publisher. Major corporations look to use advertising to enhance their image, goodwill, and brand - knowing that it will translate into the more elusive customer loyalty and advocacy in the long run. While in contrast, most small businesses, which account for 75% of the US economy, advertise to receive more immediate impact, usually referred to as direct response advertising. This is the most salient issue to understand when selling to small businesses. Selling to small businesses is a different art and science, than selling to large corporations in this regard. The following 7 approaches are good innovative starting points in beginning to analyze if your site can generate advertising revenue based on your site visitors.

1. Create and design a web site or e-newsletter that is conducive to and facilitates your advertisers. Try not to think like many publishers (i.e., I have the world's greatest content therefore, advertisers should pay for the privilege to be associated with my publication). For instance when you sell small business listings, do not warehouse the ads in a database only to be seen with a search request. Instead: use the database with an ad rotator script to rotate the ads, run of page (throughout the site), so that site visitors will actually see the ads. The reason most small businesses only want free listings, is because presently text ads have little perceived value. This is because advertising does not work when businesses are only given ads accessible with a search application.

According to May 2002 issue of New Architect magazine (formerly Web Techniques) the search engine Google (using a new ad format know as AdWords), MetaFilter (www.metafilter.com), and other blog sites are doing very well selling text advertising by either making ads keyword specific or rotating the ads. They use different methods of utilizing text ads with various scripts like TextAds (available through http://sourceforge.net/projects/textads/) and a similar script from Affordable Webspace Design: http://awsd.com/scripts/webadverts/index.shtml 

2. Sell for the long term. Advertising's impact is higher with frequency. Many small business persons will want to buy advertising on an - one time hit or miss basis. Discourage this, by setting 4 time minimums, and try to create long term advertising commitments that are low cost investments, to give the ads time to work. These approaches increase the chance that they (the advertiser) will get a response and continue to advertise with your e-publication. An example of this approach would be to create a text based advertising campaign were an advertiser would pay only $200 dollars to be listed, run of page, on your web site for a year. You would create a database and rotate the ads throughout the site. Maybe you could do profiles on the businesses throughout the year on a rotating basis. Lets say you get two sales a day after prospecting 30 prospects daily. That would translate into $120,000 dollars in ad sales revenue a year (2 x $200 = $400 x 300 days a year = $120,000) - not bad for a small site! In order to achieve this level of advertising sales success the site owner would have to prospect at least 30 cold calls a day or contract someone to handle this type of sales effort.

3. Use the informational ad approach. How many times have you laughed at a commercial on television? Are there some commercials that you love to see on television, or love to hear on radio? Television is an Entertainment medium therefore; the ads have an entertainment flavor to them. The Internet is more of an informational media therefore, information oriented advertising seems to work the best. This is probably the reason text ads in ezines and e-newsletters are some of the most effective types of on-line advertising. Encourage your advertisers to use text ads, and when appropriate, write endorsements with links for outstanding products or services, that you know that you can stand behind. Just watch out for the time honored separation between advertising and editorial in publications. Only endorse products and services if you know personally, that the product or service is outstanding. Dr. Ralph Wilson (AKA Dr. E Biz) does a good job of this in his book reviews on his site at www.drebiz.com

4. Have a good ratio between advertising and editorial. Most traditional publications have a ratio between advertising and editorial. If you have too much advertising you will begin to lose your readership. This is especially important in ezines and e-newsletters. When you have too much advertising, you should consider raising your rates or expanding your publication to keep a good ratio between the two. In an e-newsletter I would suggest a 25%/75% ad and editorial ratio respectively. In an ezine try a maximum 40%/60% ad and editorial ratio respectively.

5. If you are a small publisher, with no real chance of generating CPM, try to create or join a cooperative advertising network, where you get a percentage of aggregate CPM of a group of web sites, until you build up your traffic to go solo. Another good tactic is to partner with another traditional media, like a local newspaper or niche magazine in a similar field as your web site. Many of these publishers also neglect small business advertisers. Create a small business or classified section of their publications and calculate a good return for both your web site and their print publications in your cooperative ad rates. Then sell combo ads for both media (which is a win - win situation or synergy for everyone involved) and take your cut. The cross selling will give both your web site and the print publication extended reach, readership and circulation.

6. Sell advertising to niche or vertical marketers who will find customers in your site's particular area of interest.

7. Out source your sales efforts to experts who specialize in selling media advertising. If you do not feel capable of selling your media's advertising, why not out source it to a publisher's representative. These are people who sell advertising on an independent contractor basis. Try to get someone with contacts and abilities to sell your advertising. NAPR (National Association of Publisher's Representatives) www.naprassoc.org) is a good place to find such professionals. Use common sense, if a publisher's rep specializes in getting corporate accounts, but you have a small publication, do not hire that rep, because their expertise is not in selling to small businesses. Get a small business ad sales rep, or classified ad sales company, to sell your advertising inventory.

Lastly, you could learn to sell the ads yourself by reading books or acquiring the services of an ad sales coach to teach you how at: www.adpronline.com

Kamau Austin, is a web designer that specializes in E-business development with Internet marketing, advertising and promotion. He is the principal of AdPro Media Sales (www.adpronline.com) and the Publisher and Editor-in-Chief of Einfonews.