Online Advertising Conundrum: Editorial Integrity vs Maximum Ad Revenue
by Charles Frank
ContextWeb Publisher Advisor
Working on a medium-sized website (PsychologyToday.com) and magazine, I am faced with a number of challenges. I’m sure I have the same problems facing many medium sized websites, but I haven’t read a lot about these issues.
Maybe nobody has actually written about it, or maybe the people who do write about online advertising are not as involved with the whole process (from the business needs and technology requirements to the implementation and, finally, the reporting).
Hopefully, I can shed some light on this “unique” problem: It stems from the fact that a lot of sites are initially judged not only on their editorial content, but also by the ads they display.
A question flowing from that is:
- How do I increase the quality of advertising on the website to keep the editorial image of a reputable, authoritative source, but not lose revenue trying to place good looking, low-paying ads?
More specifically:
- How can we get some of the big (pharmaceutical in our case) companies to advertise on our site when we struggle to even get them into the magazine?
- Is it possible to earn the same, high CPMs from their ads that the bigger, more visited sites in the Health category get?
- With our site’s specialized (though relevant to almost everyone) content, where do we find the advertisers who’s ads would seem relevant for the content and at the same time not run out of advertising stock?
To resolve the issues above, we rely on three different classes of web ads on our site:
1. Direct sales ad network
As a magazine publisher our ad sales team are occupied on a full time basis selling ad space for the magazine. The vast majority of websites are not big enough to hire a dedicated sales team (or even a sales person) to focus on selling online advertising. Having a direct agreement with the advertiser (cutting out the middle man) would be the ideal situation, as those ads will pay the highest CPM; advertisers get a commitment on deliverables, whether it is a guaranteed number of impressions, or a fixed goal, like x number of clicks. They are then more dedicated to the relationship, since it is a more personal connection between publisher and advertiser. Additionally, the whole process adds transparency and more interaction between the parties. Unfortunately, most sites are just too small to even fall onto the radar of bigger advertisers and they have to resort to taking a “blind” slice of the ad revenue through an online ad network.
A way for small and medium sites to get a piece of the action is to have a revenue sharing agreement with bigger media players that have their own dedicated teams of sales people. (In our case, WebMD). If your site’s content complements the bigger player’s content, and you are not a direct competitor, you have a good chance to succeed in negotiating a revenue sharing agreement. That way you exactly know how much of the revenue will be yours and it will most probably end up being a higher net number that through an online ad network. And there is also something in it for the bigger players: they increase their network and use your site’s user demographics to broaden their network’s reach, plus earning a slice of your revenue. An added bonus for you is that they will include your site in their sales presentations, thus getting you exposure with their advertisers.
2. Online ad networks
Of course not all sites manage to sign agreements with the bigger players, so the easiest way to get started is to use an online ad network. Larger publishers mainly use online ad networks to fill remnant advertising spots, but most smaller publishers use these to sell all their inventory (and don’t understand me wrong: you can make some decent CPMs using them). There are some very large ad networks, like Google’s AdSense, but depending on your site’s content they may not be the most profitable for you. Choosing the right network may make a big difference in your revenue.
If you have good content in certain categories, testing a category-based ad network might pay off handsomely - especially if they have a few big advertisers in their network that fall in your category. Some of the smaller advertising networks might even give you a higher return, either because of their specialized advertiser roster, or more favorable terms. It is important though, to test all of the networks before settling on one, or even rotating two of the best ones. There are some good open source ad servers, like Openads you can use to rotate online ad networks on your site while testing.
3. Value-adds for our off line advertisers
In our case, also having an off-line publication does help selling advertising space on our online properties. In some instances, our website comes in handy when trying to sell advertisers into Psychology Today magazine. As added incentive for advertisers to make a commitment in the magazine, we offer value-added packages on the website, e.g an advertiser that buys into the June issue will get placement on our website for June. This might not maximize our online revenue (and does take a bit of extra manual work), but it does complement the whole offering for our advertisers.
I feel that by using the above three ways to sell advertising we are balancing our requirements of keeping our editorial integrity and maximizing our ad revenue.
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