Japan ads
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Blog monetization is a very extensive and fairly inexhaustible subject to tackle, not only because of the number of actual monetization methods (PPC, CPM, Affiliates), but rather because of the sheer number of ad networks, that promise to sell your blog’s advertisement inventory and in the process provide you an income. I’ve discussed about ad networks and blog monetization schemes in a more through article, way back, but this isn’t where I want to go. I never like talking about making money online, because the subject seems a bit trivial to me (mainly because of all the filth in the niche), but I feel like I need to share this.

Thing is there are, literally, thousands of such ad networks that promise to turn your blog into a true money maker, but at the end you only end up with a few dollars in your pocket or either way, not a respectable amount anyway. You see, ad brokers are all ripping us off! Just about all of these ad networks perceive a very high commission, mostly around the 50% mark. Just think about it for a second, that means half of what you really make goes in other people’s pockets. Better then nothing at all, right? Wrong!

I won’t lie, on my other blogs I use a few such ad networks, but only on the blogs that are still in the beginning, and really don’t have any other options, or only to handle secondary ad inventory on the more established ones, but not even that lately. What I use to monetize my blogs then? Simple, I just sell ads directly to advertisers. There’s no more commission and I get to charge my own prices. I’ve just cut out the middle man.

Pros and Cons of Direct Advertisement

GTA IV
Photo by Niko

Like anything in blogging, there’s a benefits and disadvantages ratio, who’s balance varies from blogger to blogger. For me it clearly weighs more on the benefits side, but I’ve seen a lot of people who’ve been less successful with direct advertisement, as opposed to conventional monetization. Actually let me point out that while I consider direct ad sales to be the most optimal, efficient and profitable solution for monetizing a blog, I don’t believe it works in all cases. It’s your call, you decide how to monetize your ad space, but I recommend you at least jungle a bit with private and direct ad sales.

Advatages of direct ad sales:

  • More revenue. This is really a no brainer. As I’ve mentioned If you sale advertisement directly, to potential advertisers, you won’t have to worry about any more commissions or processing fees and thus your revenue might potentially double.
  • Ad rate flexibility. There’s no ad broker to decide what’s the best price tag for your advertisement spaces, you and only you can now decide what’s the most fair price, for both you and the advertiser. This of course is firstly tied with the first point, because this way you’ll be able to actually charge more then what you used to make, with conventional monetization options and thus, again, increase your revenue.
  • Control. You now decide what kind of advertisement appears on your blog. If you feel that a specific ad isn’t suitable for your readers or you don’t want to be associated with a specific product, you can always refuse their offer of advertisement. When you’re working with ad network you have a very limited control over whatever kind of advertisement gets displayed on the blog.
  • Targeting. Since you can control whatever ad gets through, you can now have the option to choose the ads most relevant to your content and readers. How many ads about pirates have you seen on auto blogs? I know I’ve seen enough and I also know the readers aren’t too fond of them. If you’re using CPM (cost per thousand impressions), as a monetization method, most networks will display general ads on your blog; only the more exclusive networks that pay very well, but at the same time have high requirements from behalf of the publishers (200-300k uniques/mo), have really nice and targeted ads. When you’re using direct ad sales, you’re in complete control over what kind of advertisement gets through, so this way you can now have clean and targeted ads, without having to work with a big ad broker.
  • Consistency. One you get a few advertisers rolling in the first weeks/months, you’ll be well on track with your blog, financially. You won’t have to depend anymore on so many exterior factors, like traffic, CTR or even luck. It doesn’t matter how many clicks your ad get or how many sales you make; as long as you signed a month to month/quartet to quarter (or whatever period) partnership with an advertiser, these won’t matter any more. Thus you’ll have the security of knowing you finally have a consistent income, that doesn’t hazardously fluctuate every month.
  • Networking. When you sell private ad spaces on your blog and start getting in contact with advertisers, you’ll naturally start making relationships with them, relationships from which both sides can benefit in the future. The clearest example that I can give, is how I managed to sign a very convenient (let’s say twice as much as I’d ask for in normal conditions) advertising deals on two of my blogs, thanks to a person from the inside with whom I was having regular business contacts. The deal is standing even today, and we’re up for a renegotiation of the contact in a few weeks. You can bet I’ll ask for more, if it isn’t possible, there’s no biggie, we’ll just move on in the same condition (I’ll detail more about how much to charge a bit further).
  • Payment flexibility. If you’re using conventional ad networks on your inventory, you’ll most probably get paid a fix amount every month, at a fix date. When you”re selling the ads yourself you can have more ‘unofficial’ talks with your advertisers, so that you can both decided which date is most suitable for payment. I know a few people, who rely on the money from their blogs as their sole or major source of income. They have to pay their bills at the end of the month, but most either get paid early in the month or at the middle, if they’d sale private ad sales, they can have a chat with the advertiser and get the payment date around a period more suitable.
  • Diversification. “Don’t put all your eggs in one basket” is what any respectable marketer will tell you, when you approach him with a business plan and here’s where private ads get interesting. Alongside private ads, you can also run other conventional ads (adsense, adbrite etc), unless the private advertisers don’t have anything against it of course, and thus add a second stream of income, but the thing with direct ad sales is that you probably won’t be selling them just to one advertiser, you’ll most probably have 3 or 4, so again the diversification branches even further. The key is to not rely on a single income stream, because you’ll expose yourself to a ton of vulnerabilities. If you’re depended on a single source of income, then you risk getting no income at all, if, God forbids, that respective cash venue fails. (Photo by Straws pulled at random)

Disadvantages of direct ad sales:

  • Finding advertisers. This is the biggest impediment bloggers face when trying to sell advertisement on their blogs. The hunt for potential advertisers can be grueling at times and a repetitive negative answer can discourage most into abandoning the idea of selling their own ads entirely. It’s important to stand steadfast and to not give up. It’s hard till you get your first set of advertisers to cover your inventory, after that it’s all down hill from there and if you’re pretty famous or if your blog has a large readership you won’t have to worry about this altogether, because the advertisers will be contacting you and not the other way around.
  • Responsibility. When you sell private ad sales, you become even more responsible for what kind of advertisement gets across the blog. You might advertise a product that is phony or that might scam your readers, your credibility will then suffer a great deal. Be careful to what you say yes, do a good background check on your advertisers, test their products, if any, and only then give the OK.
  • Time. Besides the time you spend hunting down advertisers, which can be a lot, depending from blog to blog, you’ll also spend a decent amount of time, at the end of each month or quarter, renegotiating deals or rearrenging ad placements, if an advertiser isn’t pleased of its results. Add them up and you can end up with a lot of time ‘wasted.’ I don’t know how much of an argument this is, because it’s in your best interest to take your time in choosing the right advertisers and negotiating deals for maximum leverage, but some find it too much of a hassle and abandon the idea of selling ads on their own.

When Should I Start Selling My Own Inventory?

Hong Kong ads
Photo by Steve Webel

As you can see above, you’ll find that the benefits clearly outweigh the disadvantages (at least in my opinion), but that doesn’t mean it will 100% work for you too. Truth is not all blogs can sell their own ad space on their own, especially the small ones. I’ve seen a decent amount of blogs who’ve actually performed better with PPCs and CPMs, then with private ad sales. It all depends on your niche.

A seemingly small blog of around 100-200 visitors a day in a tight, compact niche (a blog about, let’s say, baseball cards) quite possible may be able to get more and even better paying advertiser, then a bigger blog traffic wise, of around 500-1500 uniques a day, in a more saturated niche (i.e. Tech). That’s because the smaller blog, being in a more exclusive niche, will have little competition among other blogs for advertisers and in term the later will also have limited places to pitch their services. A smaller niche, also means more targeted and interested readers and this also highly appeals advertisers, as well as bloggers (the more tighter the niche is, the more money you can get from advertisement).

Now, if we take the more popular blog we’ll see that even though it gets a lot more traffic it will be less on demand among advertisers. That’s because there are hundreds, maybe thousands of similar blogs in the respective niche, and consequently the advertisers can afford to, not only be picky, but pay less as well. The simple laws of supply and demand apply here as well, as you can very well see.

So, the only one that can answer the ‘big’ question is none other then you. It’s all very relative from niche to niche, so there’s no universal benchmark in terms of traffic, subscribers or whatever from which you can there on start selling. It’s only up to you. To actually give some advice on the matter, I’d suggest you start selling your own stuff, when you’ve at least somewhat established yourself in your niche. This means getting a decent amount of traffic and subscribers . You’ll know when your established when you see the amount of commitment at the blog (comments and private emails), linkbacks and feedback from fellow bloggers in your niche.

How to Find Advertisers?

Billboard
Photo by KoraYem

Because this is the biggest obstacle bloggers looking to sale ads on their own face, I think a few pointers and guidelines, on how to properly and efficiently find the best advertisers, is welcomed. If you’re a dot com mogul you can skip over this, for the rest of us here’s what you can do:

  • Check the competition. Actually ‘competition’ is kinda a harsh word, more like neighbors, because I don’t like to think of other blogs as competitors, we all stand to gain more, if we help out each other. Anyway, check out the more established blogs in your niche and look at what kind of advertisers they have. If you like them, visit their homepage and drop them an e-mail in which you explain what your blog is all about and how they can benefit from advertising on it. Be sure to lay down stats and testimonial. This doesn’t work very well, but you should catch a few nevertheless.
  • Don’t aim too high. Don’t start e-mailing Adobe and Microsoft to advertise on your blog, it won’t even get read, instead go for smaller, more accessible advertisers, like niche shops or various other establishments that offer services.
  • Seek out in time. A lot of advertisers have fixed budgets, planed over periods of time, like quarters, semesters or biannual. If you’ll e-mail advertisers in full season, you’ll probably get hit by a negative answer, with an ‘exceeded budget’ advocation. Instead when you find a potential advertiser, try to e-mail them around major holidays (Christmas, Easter, Valentine’s Day, 4th of July, Halloween etc.) and the beginning of summer and winter. I’m not saying you should wait until then to email and advertisers, on the contrary, but if you’re around these specific time frames do it ASAP.
  • Make an ‘Advertise here’ page. By making a special section at your blog solely dedicating to pitching your services to potential advertisers, you’ll both increase the chances of getting advertisers, among those visiting your website, and also let people know exactly what your blog can offer and why it’s a suitable choice for advertising. An excellent advertising page should include:
    • Traffic stats. This includes the number of unique visitors and page views you get every month, RSS readers, newsletter subscribers and so on.
    • Demographics. Knowing what types of people visit your blog is very important for an advertiser, so be sure to include the age of visitors (group them in age sections. i.e. 13-18: 15%, 19-35: 34%, 35-49: 50% etc.), time spent on the blog, the countries where they come from (you can display the top 5 for commodity), gender and as a bonus you can also add miscellaneous buying habits (if you’re running a music blog you could state the average visitors buys 5.6 records a year or that 1 in 5 visitors play an instrument). The easiest way to make up demographics is by holding polls (Quantcast is also awesome for tracking demographics). Also be sure to use a good stats service like Sitemeter or Google Analytics.
    • Third-party data. I don’t give too much though to them, but a lot of advertisers seem to care what Alexa, Technorati or Compete rank you blog has and also let’s not forget about the ever controversial Google Page Rank. There’s nothing wrong in adding them too.
    • Ad options. Be sure to let advertisers know what kind of ad placements they have at their disposal. Here’s a quick overview on the major monetization options you can handle over to advertisers: banner ads (the oldest form of online advertisement, it’s still very valid and reliable today), text links (the #2 earner for my blogs), website or service reviews (very popular lately), RSS ads (You can put advertisement in your feed as well, although your readers won’t be too happy about it), newsletter ads (professional newsletter today tend to have a clean magazine layout, that also leave room for ads. If you have a few hundred subscribers you can easily monetize the newsletter space.).
    • Ad packages. If you’re looking for longer and more stable deals, it would be wise of you to offer premium packages, with cost reductions. I.e. You can offer special low cost deals, if an advertiser, for say, buys 3 or 6 months ahead or if he buys multiple ad spaces. Also if you own a few blogs you can make a special ad package for the whole network, where you can deliver ads at a much lower cost then they would normally cost, if the advertiser would choose to buy ad slots individually on every blog. This way both the blogger and advertiser get to win; the advertiser gets his ads across a larger readership, at a lower cost and the blogger gets his inventory filled. If you don’t own multiple blogs, you can always team up with some other blogger, with whom you’re in closer relations and own like-minded blogs, and form a network from there.
    • Ad map. Be very specific where the actual ads will get displayed on the blog, be it in the header, on top of the sidebar, bellow the content, between posts etc. The location of an ad is directly proportional with its reader awareness level (this is why advertisers are so interested in placements) and, of course, its cost. By creating a premium ad space, located right above the fold for maximum exposure, you’ll be able to find more advertisers and also charge more. What I’ve seen many blogs do is they make a “heat map” of their blog’s advertising space, clearly showing where each ad goes. Quick example here.
    • Keywords. A lot of advertisers are looking for targeted and relevant traffic, that they can later convert into sales for their products, and, arguably or not, the best kind of such traffic is the ones from search engines. If you’ll mention in the ad pitch page, that your blog is ranked high for a set of particularly competitive keywords, you’ll more then spark some attention.
    • Testimonials. General feedback about your blog’s advertising quality is very important for credibility. If an advertiser is satisfied by the services you provide, you could politely ask him if he’d mind giving a testimonial. You can also mention here quotes or links to favorable reviews of your blog.
    • Pricing; yes and no. Whether you should also include your rates, in your advertising page, or not is highly debatable. By adding the pricing for each ad type on your blog, you’re bolting down the numbers. This is OK if you’re after a fix income level, some people (and in term advertisers) even this more professional. I, however, prefer to keep my ad rates out of the open, because I feel like fix ad rates aren’t that good. Think of yourself as an advertiser, you see a blog you like and which fits your company’s profile, and then you decide to inquire about a possible partnership. You first head to the advertise page and you feel like the rates are too high; you abandon the blog and move further. Now if the rates weren’t displayed the advertiser would take the time to contact the blog owner or the person in charge of marketing the blog, who in term will get in touch with the advertiser. A connection is now already made. Even after the blogger presents the advertiser with his ad rates and the latter isn’t happy about them, you can still do something about it. You can lower them, you can offer a bonus, you can extend his period if he buys now and so on, the important thing is that you’re open for negotiation.
    • Contact info. Of course you’ll have to give the advertisers means to get in touch with you, I’ve had a few laughs when I saw some really consisting advertisers who wanted to advertise on a blog, but didn’t know how to get in touch with the respective blogger, but they wanted so much to advertise on the respective blog, that they left comments on a post inquiring to do so. At least throw in an e-mail at the end, people!
  • Search engines. Do a search in Google for the a keyword you believe best describes your blog, like “baseball cards” or “latest gadgets,” browse a bit through the first 5-10 pages until you come up with a suitable list of potential advertisers (for maximum results also add at the end of each set of keywords, something like “shop,” “network,” “affiliates” and so on). Then you can just e-mail them. The more precise and targeted the keyword, the more niched the advertisers will be, so using laser precise long tail keywords may prove wise.
  • Forums and marketplaces. Webmaster discussion boards have always proved to be a good place to do business. Most have specialized marketplaces, built specifically for advertisement and general internet business. Great places to look for advertisers are Digital Point, Site Point Forums + Site Point Marketplace and Webmasters World.
  • Write about it. Just publish a blog post in which you clearly and plainly state to the whole blogshphere that your advertising doors are wide open to anyone interested. This is great for a head start on getting advertisers for those first crucial months.

How to Price My Ad Inventory?

iPod Subway
Photo by jmetaylor

This is a question that you should righteously raise. Ask too much and you might scare them off, ask too little and you risk underpricing yourself, and in term lose money. When it comes to selling private advertisement, I’m pretty steadfast in how I price advertisers, namely I never sell myself short and neither should you.

If you’re the one who’s contacting the advertisers, you may need to lower the bar a bit, because it’s clear you’re the one who needs them and not the other way around. If the advertiser is the one who first contact you about a possible collaboration, you should always try to make the most out of it and ask a bit more then your normal benchmark.

Don’t get too over ecstatic about an offer either, no matter how big the promised sum may seem. Take some time to think it over and let it breath. This way, although you may find yourself biting your finger nails in anticipation (It’s a weird feeling when you know you’ve got something great just waiting to happen), you won’t seem ‘desperate’ or something either. Still, how much to ask? Here’s some ideas on how you can create an income benchmark, from which you can then raise or lower your rates accordingly.

  • Use conventional ad networks. That’s right, a good, sound way to know how much to charge your advertisers is to use conventional options like PPC and CPM networks or even affiliate networks (that pay by sale, lead commission). Keep them for one month and see how much you make, be sure you monitor every ad zone. After a month, multiply that income by 2 and you’ve got yourself a fair rate.
  • Check out the competition. Again, looking over your neighbor’s fence is a good call to make yourself an idea on how advertising money revolves around blogs in your niche. Check out similar blogs to yours and head over to their advertising page. A lot of blogs have one and most of them have their ad rates on, along with their traffic details. Compare the respective blog’s general stats with yours and then look at its ad rates; this will definitely help you get a sense on how the market’s going in your niche. Of course each blog is free to set its own price tag, but when you’ve got all the blogs similar to yours with lower ad rates, guess where the advertisers will go?
  • Various marketplaces. A few lines above I mentioned marketplaces as a good mean to find advertisers, but seeing how marketplaces have become very popular among bloggers, it’s a great place to study the market too. Check out the various threads and auctions you might find in the marketplaces and analyze how bloggers sell their ad space, and, most importantly, for how much.
  • Ask around. Simply asking other people for help, whenever I’m some kind of predicament always seems to work for me, so I don’t see why it should work for you too. As a blogger you probably have at least one or two contacts with other bloggers in your niche. If they have advertisement on their blog, kindly ask them how much they charge, most of the time, depending on your relations, they’ll answer. Moreover you can ask them for a recommendation regarding the pricing of your ad inventory.

Remember to consider all the little and miscellaneous aspects that influence an ads price tag, here’s a quick reminder:

  1. Traffic.
  2. Demographics.
  3. Positioning.
  4. Format ( 728 x 90, 468 x 60, 125 x 125 etc. ) and type (animated, static etc.).
  5. The third party classes (Alexa, Google PR, Compete).
  6. The niche (one of the most important factors).
  7. Link popularity (number of quality inbound links).

Final Thoughts

[digg-reddit-me]I think direct ad sales are the ultimate monetization technique, from almost all points of view, including the ever pressing money issue. However, that doesn’t mean you should replace conventional ads altogether, far from it. Play slow and build your direct ad sales steadily, by combining both conventional ad networks and private ad sales, until you can finally afford to use only direct ads.

I don’t like talking too much about making money online (I know see this post has grown way too large) and some of my readers may find this post not to their liking, considering my previous work, however I think I need to again stress out the importance of cutting the middleman from behind your ad doors and how your business can thrive thanks to direct ad sales. Try them out for a few months (it takes lots and lots of patience) and then hit me up with an e-mail, whether it contains a positive or negative answer. I’d like to know, nonetheless. Anyway, thoughts on the subject? Past experiences? I’d love to hear you guys out.

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