How to Sell Online Ad Space
Online advertising is a cost-effective way to strategically target customers. The U.S. online advertising spending was estimated at $12 billion for the first half of 2010 and is expected to grow between 10 and 20 percent in 2011. (See Reference 2.) There are four key steps: segment your market, redesign your site, sell your ad space, and perform site audits.
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Instructions
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Segment your market. Understand the relationship between visitors and advertisers. For example, if your business sells farm-fresh jams, then companies selling home-made cookies might be interested in advertising on your site because the buyer profiles are similar.
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Redesign your website to maximize ad space and revenue potential. According to an October 2010 Online Publishers Association (OPA) study, participants developed an emotional response to the study's sample ads if they looked at them for more than 10 seconds at a time. (See Reference 3.) Your website design and content should be attractive for both repeat visits and extended-stay visits. The more often a viewer is exposed to an ad, the more chances will increase that he will click on it, go to the affiliated site and make a buying decision. This will increase your site's appeal to advertisers and boost your ad revenues.
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Sell your ad space. If your website attracts a few hundred visitors a day, then you would probably sell through an ad exchange that operates as an auction, matching buyers and sellers for advertising space. You are paid on a cost per click (CPC) or cost per action basis, meaning you are paid only if the viewer clicks through the ad or makes a buying decision. If your website attracts thousands of visitors a day, then you would probably sell through an ad network that functions as a wholesaler. You are paid on a cost per impression (CPI) basis, meaning you are paid every time a viewer visits a page with the ad impression on it, whether or not he clicks on the ad. Most companies will start out on the CPC revenue model and, over time, graduate to the CPI model. (See Reference 6.)
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Audit your site to track advertising spending. For a small site, a simple survey might be enough. For larger sites, consider the services of a professional auditing company. Auditing is important because online advertising can be subverted. Fraudsters use techniques such as running invisible banner ads and defrauding pay-per-click advertisers by creating phantom clicks. (See Reference 4.)
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Tips & Warnings
Ad networks and exchanges usually have specialized software that can manage your ad placement, rotation and tracking.
There are concerns that online advertising is rapidly becoming a falling commodity. As billions of impressions are created, the currency gets devalued. The recession of 2009 resulted in a dramatic drop in online ad revenues. If that declining trend continues, there could be a major shakeout in the online ad industry. (See Reference 5.)
References
- Marketing Charts: Image-Based Online Ad Impressions by Industry, January 2010
- ChasNote: Chart: 2011 Online Ad Spend Forecasts; October 22, 2010
- MediaPost News: Online Media Daily: Study: Do Online Ads Work? Laurie Sullivan; Nov. 2, 2010
- "Harvard Business Review" Online: Blogs: The Dark Underbelly of Online Advertising; Benjamin Edelman; Nov. 17, 2009
- "The Wall Street Journal" Online: Heard on the Street: Future Shock for Internet Ads? Martin Peers; Feb. 17, 2009
- WorkZ: Ready to Sell Banner Ads on your Site?
- Photo Credit David McGlynn/Photodisc/Getty Images
