For many Web entrepreneurs, display advertising is one of the primary methods of monetizing traffic. Display advertising is a part of everyday life on the Web, and is in many ways a very simple concept and monetization method. Of course, there are countless different implementations, pricing strategies, and degrees of success achieved with display advertising; some websites utilize make a significant amount of money and fund their operations from display advertising, while others generate relatively meager earnings from ads.
Display advertising simply refers to the ads–in various forms–served to visitors on a website. You’ll see them on just about every website you visit, and in many cases you’ll see multiple ads per page. Just as TV networks run commercials to make money to support their programming, many websites serve display ads to fund their operations.
Advertisers pay publishers (and other site owners) to have their messaging appear next to the site’s content. Just like Coca-Cola may pay to have its messaging appear in the middle of Modern Family, the company may pay to have its ads appear on any number of websites. Besides “display advertising,” there are a few other commonly used terms referring to aspects of this monetization method:
At the simplest level, display advertising often takes one of two forms (though there are countless variations of each):
Here’s an example of an image ad:And here’s what text ads look like (highlighted in red, along with a couple image ads):Ad units come in many shapes and sizes; there are dozens of different dimensions and layouts. The most common ad units used to serve display ads are (all units in pixels):
These ad units are commonly used because they are the most commonly produced. In other words, many advertisers will produce ads only in these three sizes (or sometimes only in one of these sizes). But there are plenty more options for integrating display ads into your website; here are just a few of the additional units that are used:
In addition to the standard banner ad units shown above, there are some more sophisticated implementations of display advertising that have become popular in recent years. You’ve probably had your experience interrupted by an advertisement at some point, meaning that the ad didn’t simply appear next to the content you were consuming but rather inserted itself between you and the content. Here’s an example from Forbes.com, which uses a “welcome page” to take over your screen with a display ad before you ever get to their site:
Video ads are another increasingly common form of display advertising; many of the websites that host videos will show a short “pre-roll” ad before the content plays:
From the perspective of a website owner, a major distinction is made in the means by which display advertising revenue is generated from ad units. Again, there are two general options:
Ad networks, such as Google AdSense, effectively match up suppliers of ad inventory (i.e., website owners) with advertisers looking to get their message in front of viewers. Once you apply and are accepted into their program, they basically act as your ad salesperson and begin serving ads on your site. It’s easiest and fastest to go through a network; you can have ads up and running in a matter of hours, and begin generating revenue almost immediately.
Conversely, direct ad sales requires that you establish relationships with advertisers, negotiate the terms of a contract, receive and upload the actual ads, etc. But you’ll generally make more money if you sell ads directly to advertisers; you’ll get to keep the entire fee for yourself instead of having to cut in a middleman (i.e., the network).
If you’re monetizing your Web traffic through display advertising, it’s important to understand exactly how (and when) money changes hands. Advertising arrangements generally fall into one of four categories:
Ad networks most commonly operate under a CPC model; advertisers pay when their ads are clicked. Direct ad sales arrangements can take a variety of forms, but are more likely to be priced as CPM or flat fee arrangements. CPA campaigns begin to cross over into the realm of affiliate marketing.
If you have a significant amount of traffic coming to your website, you probably have an opportunity to make a decent amount of money via display advertising. While this article supplies some of the basics of this monetization method, there is a lot more to learn about each of the points above. The decisions made and execution of your sales channel (network vs. direct) and ad unit implementation will ultimately determine whether display advertising becomes a solid stream of recurring revenue or a slow trickle.
For most websites and blogs, display advertising is one of the primary sources of revenue. Because it’s so easy to implement and can be used for sites of all scopes and sizes, it’s an extremely popular monetization method. It’s extremely easy to make your first dollar of display advertising revenue; you can be earning through ad networks such as AdSense almost immediately, and receive your first check within a month.
But making meaningful money from display advertising–five figures or more each month–is a feat that far fewer bloggers and publishers ever achieve. This section outlines the basic steps needed to get you from a meager AdSense check to a thriving display advertising business.
Display advertising revenue is a very simple formula:
Display Ad Revenue = Ad Impressions Served x Revenue Per Ad Impression
Optimizing the right side of that equation is the challenging part; it’s a process that will vary for each site, and will likely take a significant investment of time and effort on your part.
At the risk of sounding obvious, the amount of money you earn from display advertising will depend in large part on the amount of traffic your site receives. The more visitors to your site, the more ads you’re able to serve and the more money you’re able to generate from the advertisers who appear there.
Of course, traffic volume is not the only factor that impacts display advertising success. Lots of large sites struggle to make much money while many smaller ones are extremely profitable. This site doesn’t cover the various approaches that can be used to build traffic and grow your audience; instead, we’ll focus on how to make more money from your existing traffic (the next two factors on this list).
The second factor that determines display advertising success relates to the manner in which you decide to present ads to your visitors. This might seem like an irrelevant detail, but the layout of your site and placement of ads can have a major impact on the bottom line revenue that is ultimately generated. For a website with a given number of pageviews, there remain countless variations for setting up the display ads that will be shown to visitors. Among the decisions that must be made:
Unfortunately, there’s no universally right answer here. The specific ad setup and implementation strategies used will depend on a number of factors, including your niche, type of visitor, and site design. Generally, you’ll want your ads to appear in sections of the site where visitors will notice them, but while being careful to make it clear that they are indeed ads (and not part of your site). Consider here that sometimes less is more.
There’s a temptation to jam ads wherever you can and maximize the amount of real estate dedicated to display advertising. But sometimes it can be helpful to remove certain ads that result in a negative user experience (therefore lowering traffic and the perceived quality of the site) and focus on attracting eyeballs instead to a smaller number of well integrated and less obtrusive ads.
For the vast majority of bloggers and publishers out there, display advertising success will depend in large part on the effective CPMs that you’re able to generate for ad units on your site. That’s an obvious statement, but what is less clear to many is the specific levers that impact CPMs.
Experimenting with different ad networks and ad implementation strategies is one way to try to increase your eCPM. But the compensation you receive for showing display ads on your site ultimately comes down to your ability to establish relationships directly with advertisers who understand the value of your audience and are willing to pay premium rates in order to reach them.
There are a couple of potential wins by “going direct.” Of course, keeping the 30% – 50% of gross earnings that normally goes to ad networks translates into a nice earnings boost. But the bigger win is in communicating the value of your audience to advertisers who are looking to run both direct response and branding campaigns, and forcing them to buy directly from you. In doing so, you separate your site from the countless other publishers who flood ad exchanges.
Of course, some sites have such massive traffic figures that they don’t need to generate high CPMs in order to turn a profit. Picking up millions of nickels and dimes adds up if you’re able to grab them frequently enough. If your site generates significant traffic, you may be able to maintain profitability without lifting a finger to sell ads directly. But for most publishers, profitability will depend on establishing and maintaining direct relationships.
At the end of the day, display advertising revenue is a function of how much traffic you’re able to attract and how efficiently you monetize that traffic. While there are opportunities for incremental gains on the revenue generated through display ad networks, the big wins come when direct relationships are established with advertisers and the middlemen are cut out of the equation. If you have a high quality site that can deliver meaningful value to advertisers, an investment in a direct sales force has the potential to pay huge dividends.
Publishers looking to start selling display ads directly will be forced to make a number of decisions in their attempt to monetize this traffic. If you’re fortunate enough to gain traction and start getting some RFPs from potential advertisers, you’ll likely need to decide which pricing methodology you’ll use to sell your display ads.
Because digital display ads can be tracked and analyzed in ways that don’t apply to more traditional advertising media, they can also be priced in different ways. Advertisers are able to track when their ads are clicked and what actions are completed once an ad is clicked, opening up the options for compensating publishers based on different criteria. There are three primary ways to price display advertising:
To learn more about the specifics of these options, including the pros and cons of each, read this post on how to sell display ads.
As any website owner looking to monetize traffic through display advertising knows, not all ads are created equal. You’ve probably noticed that different sites use different combinations of display ads; some stick to the standard leaderboards and rectangles while others prefer to serve up smaller buttons. The exact ads used vary from site to site (and often even within sites), and the optimal layout and strategy for generating revenue from those ads will as well. Though most display ads served on the Web fall into one of the handful of standard sizes, there are a lot of additional options out there. Below are 25 examples of various ad units in action, from the IAB standards to the more unique and creative implementations.
Let’s start with the ad units that IAB considers to be standard; these units are the most commonly used placements.
The 300 x 250 rectangle is one of the standards that appears on a lot of different sites:
The 728 x 90 leaderboard remains one of the most commonly used ad units:
The skyscraper is one of the most popular vertical ad units:
IAB no longer considers this ad unit to be a standard, but it’s commonly used in the Google AdSense interface so we’ll cover it here. This unit is a slightly larger rectangle than the more widely used 300 x 250:
Many sites feature smaller ad units that take up much less real estate than the IAB standards. Below are some button implementations in several different sizes:
Here’s a very short button implementation:
The 88 x 31 button is a commonly-used compact unit:
Here’s a banner sponsored by Corona implemented on RottenTomatoes.com:
These buttons are popular with publishers looking to fit in ads from a number of different sponsors:
Here’s a slightly different button implementation that can be used in “Partner Centers”:
Yet another button size that can be fit just about anywhere on a site:
Here’s a unique placement that often runs on the Yahoo! home page:
This button is a bit wider, and could be inserted into content as well:
This unit works well if you have a few sponsors or internal features to promote:
Also at CNN Money is an example of a 278 x 40 button. These look like a smaller button accompanied by text, but they’re actually just one unit:
In addition to buttons, skyscrapers, leaderboards, and rectangles, there are a number of other ad units out there. Below are just a few examples.
This ad unit, which could work either in a rail or inserted into content, isn’t all that common:
Here’s a skyscraper that’s much more narrow than the standard 160 x 600:
These ad units can be combined to create a placement similar in size to the standard 300 x 250:
As part of a roadblock, WashingtonPost.com includes 184 x 90 buttons along with some more traditional ad units:
This banner can also be used within emails, since it’s less than 600 pixels wide:
This wide banner will run the entire length of most sites:
Cars.com features a unique wide banner on its home page:
This 970 pixel wide leaderboard expands down to 315 pixels high:
This wider version of the 160 x 600 has become increasingly popular in recent years:
Here’s a link unit implementation near the nav bar:
This welcome screen pops up when visitors arrive at Forbes.com:
If you’re looking to monetize a web site through display advertisements, you’ll have a number of decisions to make along the way. It’s worth putting some thought into how your site is structured; the ad units you have available will go a long ways towards determining how much you’ll earn from ad sales. As shown above, there’s no shortage of options out there!
When most publishers discuss display advertising as a monetization route, they focus on the standard ad units that we now see just about everywhere online: 728 x 90 leaderboards, 300 x 250 rectangles, and other standard IAB units. While these standard ads account for the bulk of display advertising revenue, there is now much more to this space. Display advertising now goes far beyond banners and towers, with creative publishers embracing new methods for generating revenue. Here are five creative ideas for expanding your list of monetization methods via display advertising:
Odds are you’ve encountered in-text links before. These are hyperlinked words within the content of a Web page (e.g., within an article). Instead of taking users to more content, ads are shown when the highlighted text is hovered over.
There are a number of companies that provide in-text link partnership opportunities, including InfoLinks and Vibrant. Revenue Potential: In-text links can become a significant driver of revenue if implemented correctly. Some bloggers have experienced CPMs as high as $10 on these placements alone. For more details, check out Tyler Cruz’s detailed review of InfoLinks.
Many AdSense publishers aren’t aware that in addition to three standard banner ads per page, Google allows you to have up to three link units as well. These placements display a series of relevant text links that send visitors to a page of sponsored results. From that page, you’ll earn revenue for each click generated. Below are a few examples of link units from Google, which come in several different shapes and sizes:
Revenue Potential: Since openly discussing CPMs is a violation of the AdSense terms of service, it can be a bit tough to pin down estimates of the revenue potential here.
Search boxes are another “legal” way for publishers to get more than three AdSense units on a page; in addition to three standard ad units and three link units, you can put up to two search boxes on your site. If you use Google’s Custom Search Engine program, visitors will see sponsored results along with in-site search results. Similar to traditional AdSense, there’s a revenue split between the publisher and Google for any revenue generated from clicks here.
Revenue Potential: Custom search pages can deliver great results; it’s possible to achieve CPMs of $10 or more in certain niches with this placement. Unfortunately, there’s usually a pretty low volume of pageviews since most visitors don’t use this function on a site.
Email is another often overlooked opportunity to show banner ads, and because visitors aren’t used to seeing ads within their emails this placement has the potential to generate attractive CPMs.
Services such as LiveIntent offer publishers the opportunity to put ads into their email newsletters.
This implementation won’t work for most publishers, but can be a creative way to make a few extra bucks if you have an anti-robot CAPTCHA wall on parts of your site. Check out what Ticketmaster has done with the traditional process; instead of nonsense, users are prompted to enter in a tag line or slogan:
Solve Media can partner with publishers to provide type-in CAPTCHA services; they also offer similar functionality for pre-roll video. Our interview with one of the pioneers of the sponsored CAPTCHA industry also sheds some light on the opportunity for publishers here.
Revenue Potential: This solution will probably only generate a few cents per visitor, but it will be purely incremental revenue to publishers.
As the display advertising industry continues to evolve, publishers are being challenged to come up with creative solutions to get the most out of their audience and deliver the most value to advertisers. While banners and towers aren’t going away any time soon, the most successful publishers will be the ones that diversify their display advertising revenue streams and aggressively seek out incremental income.
If you’ve been utilizing ad networks to generate display advertising revenue, you’re probably pretty used to making less than $10 for every 1,000 pageviews your site receives. Many publishers go their entire careers selling their inventory on a broad, unspecialized market, where it’s essentially lumped in with all the remnants from across the Web. But to some publishers out there, single-digit CPMs are a completely foreign concept.
As we’ve discussed previously, building a valuable and targeted audience and setting up a direct sales team can be a lucrative proposition. Below are examples of websites that prove that to be true, based on the extremely attractive rates their ad real estate commands.
Interestingly enough, this advertising industry publication is one of the most expensive digital properties anywhere. When you see a lot of industry ads and congratulatory messages on this site, you can be pretty sure the buyers behind them are writing some big checks. (yes, that is a $100 CPM for a leaderboard.)
BBC’s TopGear.com, a site designed for car enthusiasts, also demands some premium CPMs. Traditional units are priced north of $20 apiece, and pre-roll will cost between $50 and $75 per thousand impressions.
The digital version of fashion magazine Elle might not have the wealthiest audience, but the ability to target a very specific crowd–young female adults–comes at a premium price.
To see rate cards for several other well known properties–including Esquire and Cosmopolitan–check out the linked image above.
The digital presence of Popular Science magazine attracts a lot of folks interested in science and technology. In order to get your ad unit in front of this demographic, you can expect to cough up more than $60 per thousand impressions:
This publication focuses on luxury goods, from cars to watches to travel. The rates for traditional display ads aren’t available, but we do get a peek at what they charge to get your ad on their tablet. (Note the premium they throw on if you don’t also advertise in their print publication.)
This publication caters to financial advisors, a demographic that can be very attractive to mutual fund companies and others in the financial services space. Not surprisingly, there’s a pretty steep price tag to get your message across.
This magazine covers travel to exotic places, meaning that most of the visitors likely have the means to spend quite a bit of money (and an interest in international travel). Traditional banner ads demand CPMs north of $20 each, and special units can cost quite a bit more:
The numbers above should be inspirational to publishers out there who are struggling to get by on single-digit CPMs they’re squeezing out of ad networks. Moreover, a common characteristic should jump out: each of the sites above caters to a very specific audience–whether fashion-conscious young women or car nuts–which gives advertisers an opportunity to deliver their messaging to a targeted group.
For websites that rely primarily on display advertising to generate revenue, there are a number of opportunities to squeeze a bit more juice out of existing traffic. We cover a number of these topics in our various e-books, including link units, sponsored CAPTCHA, and affiliate marketing. This section explores another option that has been proven to add to the top line–but that has some potential downside risks as well. Today, we’re talking pop-ups. If you spend any time online, odds are you come across these quite regularly. In most cases, sites use them to promote their own products. Here’s an example from FamilyCircle.com, promoting a subscription to its magazine:
Similarly, here’s a screenshot from Time Out Chicago, encouraging visitors to sign up for newsletters:
Finally, below is an example from the Chicago Tribune’s website. Notice that this ad opens in a separate window from the site, and that it contains a third party ad (in this case, a pretty spammy one):
The Tribune no doubt decides to run this type of ad because it makes quite a bit of money by doing so (without cannibalizing their more traditional on-site banner ads). For publishers willing to host this type of experience, there can be a big opportunity to generate some incremental earnings here. Learn more about how to make money with pop up ads.
Though traditional banner advertising still accounts for a significant portion of the digital advertising industry, non-traditional alternatives continue to pop up and gain traction with both large publishers and smaller bloggers. Most of these newer opportunities don’t aim to replace traditional display advertising, but rather to supplement the primary income stream with smaller payouts that can result in a more attractive overall revenue profile. Find out more here.
During the past couple of years, websites who rely on display advertising to monetize their existing traffic base have had a number of additional opportunities made available to them. It’s no longer AdSense or bust; there are now several creative monetization solutions that are available to publishers both big and small.
One that has seen widespread adoption is the sponsored content model. Many of the largest sites in the world, including ESPN.com and CNN.com, now have sections of their pages dedicated to “Content from Around the Web” or “You May Also Like.” (Note that we’re using “sponsored content” to refer to the widgets offered by companies such as Taboola and Outbrain, and not native advertising.)
These sponsored content networks work in the same way that traditional ad networks such as AdSense do: they match publishers looking to monetize inventory with advertisers looking to get traffic to their site. But unlike many traditional ad networks, the buyers here (i.e., the advertisers) are often just other publishers looking to drive traffic to their sites. In other words, a lot of publishers are on both sides of the sponsored content revenue equation. Check out our full post on Taboola vs. Outbrain.
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