Getting the right ad strategy for your site

Wikipedia tells us that the first banner ad was put online on October 25, 1994 (although in the spirit of Wikipedia a citation is needed!). The entry goes on to say that HotWired was the company to conceive of the idea and coin the term. Things have come a fair way since then.

My day job is assisting companies execute internet retail projects (I use “internet retail” as the term eCommerce has too broad a definition for too many). Like any business venture some of these projects fail spectacularly, while others provide results unlike any preconceived.

When a particular project starts heading to that place that nobody wants it to go I am consistently shocked at a response that too often comes up. AdSense. For those not in the know, AdSense is a service provided by Google that connects publishers and advertisers. So, the proposition of the website may not have been right, there may not have been enough marketing dollars to reach any kind of critical mass. Whatever the reason, the white flag has been waved. I can’t follow the thought process that results in choosing to place advertising on that category of site to supplement its income.

Presumably part of the reason the site is failing is because it does not attract enough visitors so the AdSense revenue is going to be frighteningly small. Worse though, there is now every chance any visitors that do come are now leaving the site instead of staying long enough to understand or engage its proposition. Clearly in site advertising (unless used as a navigational aid, i.e. internal linking) is not for every website.

Down the small end of town we have boutique “nick nack” web applications, personal blogs and small scale parked and squatted domain pages. Obviously this scale of endeavour can’t justify accumulating advertising inventory. This makes it a perfect candidate for AdSense. The only “publisher” network similar to Adsense I know of is Yahoo! Publisher Network (YPN), but it is limited to U.S. companies and is in beta. Unless you have been living under a rock you will understand why Yahoo! are unlikely to get anything out of beta at this point.

Given that AdSense appears to be the only game in town it is worth some exploration. AdSense is “self serve” for both advertisers and publishers. The big reason AdSense is able to do what it can is because Google already has the world’s largest online advertising inventory by virtue of their Adwords service. The world’s largest inventory combined with some keyword matching techniques makes for some really neat often relevant in site advertising. Somewhat scarily though (And this may have only been my imagination) I have noticed that Adsense ads served straight after performing Google searches results in ads related more to my previous Google searches than related to the content I am currently looking at.

The other angle that scares me is that AdSense appears to be the only game in town. Surely there is scope for another provider of a like service. Competition is necessary! While I am talking about the seamier side Adsense has allowed all kinds of useless somewhat evil practices (such as domain squatting mentioned earlier) to flourish because of the ease with which page views can now be monetised. Sure, this is possible without Adsense, but from the “do no evil” company there may be some explaining to do.

Finally, AdSense will only pay out publishers when the amount owed reaches $100 USD. Small sites can wait years before seeing an actual payment. Think of that figure adding up! Well imagine no longer, we can figure out what the number is. According to Google’s second quarter 2008 financial report they have “Accrued revenue share” in liabilities booked at $517 million. That figure should have most thinking twice before believing Adsense is the answer to any cash flow crisis.

Heading uptown we have sites that are partnered with or have been acquired by the traditional media companies. Traditional media already had the inventories and the relationships with advertisers to ensure they would participate online as they do. Nobody should be surprised that the larger portal sites are called “ninemsn” and “yahoo7”.

APC is the perfect example of a site within this machination. You are reading this content as it was procured by a company that specialises in publishing. On such sites you will often see particularly dimensioned rectangles dedicated to advertising space.

APC has a few banner style placements at 728 pixels wide by 90 pixels high and a few medium sized rectangles at 300 pixels wide by 250 pixels high. Not surprisingly those dimensions are standardised advertising sizes. This allows, in this case ninemsn, to acquire inventory without having to negotiate sizes of ads with each of its publishing partners (which you can imagine would make the process many times more complicated). For the curious those standard dimensions in pixels seem to be (but are not limited to):

Ad Type	Width	Height
Rectangular	300	225
Banner	728	90
Skyscraper	120	600

AdSense is now supporting richer formatted ads and not surprisingly they are supporting the standard real estate sizes. Now that is in play it will be interesting to see if any sites currently partnered with traditional media jumps to the Google world order. The heat keeps being turned up on traditional media channels.

Points of the post:

• Only put advertising on sites where it makes sense to do so.
• For the small time operator AdSense is a reasonable way to convert appealing content to cash, however, “Caveat Venditor” – let the seller beware. Having no decent alternative really irks me.
• The big boys have the rich ads along with the infrastructure and content to sell them and serve them. Thank goodness pop ups are dead!

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In his real job, Luke Amery works on shopping cart software. He is the technical director of On Technology, Australia's leading e-commerce development company.