Seems Impossible
In just 40 days, the first 40 of November and December 2010 alone, there was over $22 Billion spent online. This is according to Comscore and is up 12% from the prior year. Also, five of the top 10 spending days online have been this year and the year is not over yet. More detail is found at the comScore Press Release.
That figure was 16% higher than the previous year. Incredible.
Online Ad Prices
I read this article in Advertising Age about Social Networks Sink Online-Ad Pricing, it’s a good read. Advertising Age quoted some statistics from May 2009 to May 2010 from Comscore, here is the quote from Advertising Age:
“A recent analysis by ComScore shows social networks, primarily Facebook and MySpace, have over the last year drawn an average CPM of only 56 cents, compared to the $2.43 average for the internet at large.”
What Does This Mean?
You can draw your own conclusions about what this does or does not mean. Essentially markets are supply and demand and the better a market can gauge the value of a product or service, the faster a stable price will be achieved. Of course there are many factors, including supply and demand as well as effectiveness. Just because social sites drive inventory does not mean they drive hefty revenue. And it is amazing how easy it is to effect supply and demand. Imagine if Facebook has three ads per page and removes one, all the sudden inventory drops by 33% and individual ad CTRs and responses may increase (purely hypothetical). The same is true if they decide to increase advertising units on a page.
Why Should You Care?
The reason I wrote this is not to get into the intricacies of pricing and all the variables but to simply point out that you can purchase some cheap online advertising and test it for yourself, it may or may not work for you. Whenever you find a niche that is relatively cheap it is worth testing and then exploiting before it’s gone.
The Rubicon Project Market Intelligence report can be found here at the Rubicon Project. As Rubicon aggregates advertising networks to optimize publishers revenue they have unique insight to the online advertising market. Each quarter they release a report. It is free for the exchange of your name and email.
It is a 25 page report that is worth reading. Of note is their Rubicon 20 Index which tracks the CPM rates across 20 of the top publishers. They noted a 34 percent increase from Q3 of 2009 to Q4 of 2009. Here is a snapshot of their Rubicon 20 Index.
About their report in their words:
Our quarterly Market Reports offer insights and intelligence around emerging trends in online advertising. This latest Market Report examines our Q4 findings and trends for the year ahead, including the ongoing evolution in the ad network market; the importance of optimizing inventory through pricing; and advertisers push for greater control and transparency.
Take a look at the Rubicon Project and get a copy. By the way, the picture is of Rubicon CEO Frank Addante.
Why Link the Accounts?
If you use Google Analytics for your website statistics and place Google AdSense advertisements you can link the two accounts. But why would you care? By linking the accounts you are provided with information on which pages are generating adsense revenue. After analyzing the information you can better optimize your site, your pages, and the adsense code itself (type of ads, colors, font etc.) to increase the adsense revenue from your site. Simply placing adsense code is not enough to maximize your revenue, you need to optimize to increase your revenue per page and ultimately per site.
Linking Google AdSense with Analytics
Within AdSense on the main page, after you login, you will find a link to connect the two accounts. If you already have Google Analytics you can choose that option, or if you do not it will allow you to create an account. If you do have an account the next screen will show you all the sites you have in your analytics account. You simply check which ones you wish to link and you are done. However, it will only work if your login email address for AdSense is the same as your login email address for Analytics. If they are different, then read on to connect the accounts.
What If You Login With Different Emails?
This is why I wrote this article. It is a little confusing if your logins for AdSense and Analytics are different. But here is the fix. You login to your analytics account and at the top you choose the link that reads Analytics Settings, then at the bottom of the page you choose to Add a User. Now when you add a user you have to add the email address that you use to login to your AdSense account and you MUST make them an Account Administrator.
Once you have set up that new user in Analytics, return to your AdSense Account. Now click the link again on the main page to link AdSense with Analytics. This time when you choose the option that states you already have an analytics account it will take you to the next page where you choose which site profiles you want to link. It now works because you created an administrator user on your Analytics account that matches the user login on your AdSense account.
That is it, now after a few hours once the two are linked by Google you can begin to analyze your account.
The IAB, Internet Advertising Bureau, provides an archive of internet revenue reports. Here is the archive of the Internet Advertising Revenue Reports. For the first quarter 2008 internet advertising was $5.8 Billion, the second highest quarter yet.
The Rubicon Project is an ad optimization tool.
Rubicon Project Explanation
You may run advertisements on your site. The Internet Advertising Bureau (IAB) has a list of standard advertising unit sizes, as an example a common size is a 300×250 (refers to the pixel width and height) ad unit. When you join an advertising network such as AdSense, Yahoo Publishers Network, or others, they typically have all of the standard IAB sizes. You would then place code on your site to display ads from these networks. The code will only place the advertisements from that one network, to rotate them you would need to use a script or ad software.
However to determine which advertisements are paying the best for your site, page, position, ad type, etc., you would need to check each network every day and keep a spreadsheet. However what you would be unable to do is what ad optimization networks like Rubicon do, and that is optimize by determining which ad network to pull an advertisement from based on the page, position, geographic location of the person and more, in order to optimize your revenue. Revenue is measured by an eCPM (estimate cost per thousand). If the eCPM is $1.20 then you are making $1.20 for every thousand ad impressions.
Setting up Networks
Rubicon has two types of networks.
Smart Matched Networks
When you initially join and set up a website, receive your Rubicon ad code, and place the code on your site you will instantly begin displaying advertisements because Rubicon already has relationships with certain Advertising Networks in place. Therefore advertisements are being pulled from a list of about 10 already setup. These are the Smart Matched Networks. Which Smart Network advertisements are pulled from depends on settings under the Sites tab that I will explain in another post. As a quick example, you can choose to show both display advertisements (graphical ads) and/or text ads. If a network does not have text ads and you chose to only show text ads, then obviously that network will not be part of your mix.
Baseline Networks
These networks can be manually added by you. There are two reasons you would add them, you may want to add additional networks that are not already part of the Rubicon Smart Matched Networks or you may already have a network relationship and you would like to keep it.
There are a lot of networks you can choose from under the Baseline Networks. Simply click the “add” button next to the Baseline Networks heading and you will see a list. However to add one of these networks you must have a relationship with them. In other words you must sign up with them, be approved, and when entering into Rubicon you would need to have your login and password to set it up. Now when you do this you can still log into the original ad network directly to obtain stats and/or get them from Rubicon. The benefit of having the advertising pulled from Rubicon is to optimize your inventory to achieve the highest eCPM, the most money possible per impression. However, there are costs associated with this so read on.
How You Get Paid and How Rubicon Gets Paid
Rubicon charges a 10% fee. Therefore if your total revenue for the month is $1,000 Rubicon would receive $100. Now here is how it breaks down if you have added networks using the Baseline Networks. First the Smart Matched Networks are Rubicon relationships so let’s say you make $100 from them in one month, then you make $100 from a group of Base Line networks that you signed up for and added to Rubicon. For the Month you would make $200, however Rubicon would take a 10% or $20 fee since they optimized your inventory. Now Rubicon’s Smart Match Networks made your $100 minus their $20 fee (fee is on the total $200) and you would receive an $80 check from Rubicon. The $100 from Baseline Networks would come directly from those advertising networks you have direct relationships with. The question is whether you believe a 10% fee is worth Rubicon optimizing your feeds. Assuming they can take your $.90 eCPM to $1.00 or more, then yes, it’s definitely worth a try.
First, I have to say that PubMatic is a great tool to rotate multiple advertising networks on your site. Take a look at a previous post discussing how they work here.
Determine where to place the AdSense code
The test, and I am only 2 weeks into this test, is to determine where best to place advertisements on your page. I had originally identified two places to put the AdSense code, on the right navigation as a 300×250 rectangle (although more common are the skyscrappers) and at the bottom of each post. Recently I added the code to the top of the page.
Three common places to place AdSense
I wanted to compare the following placements.
Results of Placements
Results below are shown as a eCPM which is an “effective” CPM or Cost Per Thousand. In other words, for every 1,000 advertisements shown what is the total revenue (on average) of the Google AdSense ads.
Therefore the top of the page is 10 times more profitable than the right of the page. Obviously part of the reason is that the Top of the Page ads are the first a visitor sees. Influencing these tests are where on the page is the 300×250 placed, in the top fold or not. Top fold is the first area of the screen that a visitor can view without scrolling down. The reasoning for the bottom of the post is that a visitor will hopefully read the full article and when coming to the end will see relevant offers presented by AdSense.
Conclusion
Test multiple placements, for me the top of the page is by far the most profitable. However, some may view ads at the top of the page distracting so you will need to balance your desire for ads there.
Making money with Google AdSense can be an excellent source of income for your site. I tested a generic site using Google AdSense and a niche site to determine which is more profitable.
The benefits of implementing Google AdSense is the fact that it is:
Many factors can determine how much you earn, such as:
The average revenue per click depends on two main items, your content and the associated ads. If your site is focused on life insurance and another site is focused on cellular phones, then the ads placed on the sites will reflect life insurance and cellular phones respectively. Google matches your content with their advertisements. You can only attempt to control the type ads on a page with the content on the page. Therefore the ads will match your subject matter. By the way, you can always obtain utilize seo services to rank well and the average cost per click will be averaged over the cost of the services and over time will probably pay off.
The average revenue per click will depend on the worth of the keywords that are being bid on by advertisers. How words obtain different prices from advertisers depends on multiple factors and is a subject for another story. Typically if those selling life insurance products and services make more per sale (assuming equal click through and conversion rates) than those selling mobile phones then the site with life insurance content will make more revenue per click.
Test of Generic and Niche Site Content Revenue
I created a site due to my passion for Venture Capital and those that are funded, called Venture Capital Update and implemented Google AdSense. This is a niche site focused on Venture Capital fundings, Venture Capital firms, and entrepreneurs.
This site Longest.com is more of a generic site. While the focus is on learning what does and does not work in the realm of making money online, the stories and subjects can vary greatly.
Here are the results after 2 months of running Google AdSense on both sites.
The implementation of Google AdSense was as close to exact on both sites as possible. The eCPM is an effective cost per thousand, meaning for every 1,000 pages the ads appeared on that is the amount earned on average. Above you can see that the click thru rate was better on the Venture Captital Update site and the earnings per page denoted by eCPM were also higher. The earnings per page are a factor of both the price bid on keywords that match your pages content as well as the click thru rate, the more that click per 1,000 pages the more revenue you will earn.
The conlusion here is twofold, the higher click thru rates denote advertisements were more targeted to the content and site visitor on the niche site of Venture Capital Update. It may also be the case that the keyword prices that were bid on related to the niche site were higher as well. As this test is not perfect, it was over a period of 2 months and the difference in revenue was large as the niche site earned much more. If you wish to optimize your Google AdSense earnings I suggest you create a niche site as I did for Venture Capital.
Click below to sign up with Google AdSense:
AdBrite’s BritePic allows you to make money with your pictures. You simply use their code for each picture and AdBrite places text advertising around the picture. Clicks earn you money. Your pictures do not take up any more space than they normally would.
Some of the features of BritePic are:
Here is an example of a picture I took and the BritePic ads:
Sign up here to use the Full Page ads from AdBrite.
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AdBrite will sell ad space on your site for you. They have many options to generate revenue from your site. You control what type of advertising you would like on your site. (Sign up here). Ad units include:
Text only, and text w/banners work much like Google AdSense, advertisers may choose to place their advertisements throughout the network. When using the text w/banners, text will display when banners are not available.
Full page advertising allows appears between webpages on your website. When a visitor moves from one page to another they are shown an advertisement with the top of the webpage identifying your site and the bottom of the webpage is an ad. Each visitor will only see one per visit so they are not annoyed.
Inline Ads highlight keywords on your page by underlining them. When the mouse hovers over the word an advertisement appears to grab their attention and a click on the word earns you revenue. These ads are very unobtrusive and a nice supplement to other forms of advertising on the page.
BritePic ads allow you to monetize your pictures. By using the AdBrite system they place an advertisement at the top of your picture. When clicked you earn revenue.
InVideo ads allow you to monetize your videos. By using the AdBrite system they place an advertisement, much like BritePic, at the top of the video and you earn revenue when clicked.
You may choose any or all of the above. We will write about each advertisement type and test each one.
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