PowerHomeBiz.com was recently featured in the blog of the search-targeted advertising network Chitika in the post entitled “Mega Unit gives 450% revenue increase to PowerHomeBiz.com”. The post detailed how using one of Chitika’s new (and big!) ad formats significantly increased our revenues.
PowerHomeBiz.com is a free information and resource site for home business entrepreneurs, with ads as the primary source of monetization. We’ve been running ads on the site a few months after we started in 1999, and we were fortunate to get direct advertisers immediately.
We’ve been selling ads directly ourselves. In addition, we joined several banner ad networks – cost per impression (CPM), cost per click (CPC), and cost per action (CPA) ad networks — to find the best way to monetize our site. We signed up with ad networks such as, BurstMedia.com, Valueclick.com and for a short time, TribalFusion.com. We also joined performance driven aggregators such as Linkshare.com and Commission Junction. Then in 2003, Google Adsense was launched and we joined the program right off the gate. We also dabbled with Yahoo Publishers Network, though we’ve since removed all their codes on our site. Chitika.com was the last ad network that we joined in, and that was back in 2005.
Some of these advertising networks worked for us, and others failed. Let me put it this way: while the daily income in some ad networks allow us to eat the pricey Kobe beef everyday, others cannot even pay for the subway fare. The failure is either a result of the fact that their ad models are not right for us, or because we did not take time to actually understand the best way to make them work.
Aside from the Chitika experience, here are some lessons we’ve learned from earning through advertising in our 10 years on the Web:
1. Find the best fit.
Not all advertising programs are right for you. Some will work better than others. Your success will depend on the type of ad program you choose and the qualities of your site.
A CPM-based ad network such as TribalFusion will work best for a very high traffic site. Since you will be paid per 1,000 ad impressions, the higher your traffic, the better your earnings. If the net CPM of the ad is $1, a site with only 20,000 monthly impressions will earn only $20, while a site that generates 2 million impressions per month will earn $2,000. Big difference!
Cost per click programs such as Google Adsense will work best for a site with a “highly responsive” audience because your earnings will partly depend on the number of clicks to the ads. To earn well, visitors need to view the ads as additional resource to the information on your site (e.g. a travel site offering tips on traveling to Europe with ads of vendors offering airline reservations, bags and luggage, or package tours).
If you are running a forum or a site that attracts huge number of repeat users, understand that these visitors are quick to develop banner ad blindness and will ignore the ads they see on your site. Hence, a CPM-ad will work better compared to a CPC or CPA ads
2. Don’t put all your eggs in one basket.
Ask yourself the question: if the ad network you are using suddenly closed – or you’ve been kicked out from that ad network – what will happen to your revenues? It’s one thing to lose 10% of your revenue source, and another to lose 95% of your revenues, which will happen if you concentrate solely on one main ad network.
When something works and you earn huge amounts from one program, it can make you lazy and not exert any effort to develop other revenue sources (it certainly happened with us). But you always need to be aware that the good times may end, and you definitely need a Plan B. And the time to develop a Plan B is when everything is still working out well, not when the prospect of losing 95% of your ad revenues is staring at you.
It is important that you diversify your revenue source, and develop as many as you can but without stretching yourself too far.
3. Take the time to learn how each of your revenue sources really works.
When you sign up for an ad program, keep your ears open to on how to maximize your revenues.
In our case, we made the mistake of ignoring Chitika and how much they have developed their program in the last five years. We tried their ads when we joined in 2005, and we were not impressed at all. Their Chitika eMinimall ad program simply did not work for us. When they launched the mega ad units of their Chitika Premium program and announced it via their newsletter, we took notice of how these ads could work on a site. We tried it, and found it to be a good moneymaker for us.
There are many ways you can learn how to best use the ad program. Google Adsense, for example, has a blog where their employees offer tips for income optimization as well as conduct webinars discussing techniques for better ad formatting and positioning. Sign up with the newsletters of these ad programs, where you will get information on new products, best practices of what worked, and tips on how to increase your income from their programs.
BurstMedia.com has an active forum where the members discuss tips and general information on increasing ad revenues. Also check out general Webmaster site, blogs and forums such as WebmasterWorld.com for experiences and learnings of other web publishers that may work as well for you.
4. Balance aesthetics with your revenue model.
One of the criticisms we’ve received, including some of the comments in the Chitika feature post, is that PowerHomeBiz.com is ugly with too many ads. And they’re right! Our site was designed in 1999, and it sure looks and feels like 1999.
But should we redesign PowerHomeBiz.com to make it look prettier? Possibly not, the site as presently designed works in terms of generating ad revenues. Changing its layout, design and structure may affect our bottomline, and that’s the last thing we want to tamper with.
This reminds me of an interview with Markus Frind, the founder of the free dating site PlentyofFish.com – another really ugly site that generates millions in terms of revenues. As Frind stated in an Inc Magazine interview, where the writer described his site as “something your nephew could have made in an afternoon,” Frind is aware of his site’s flaws but isn’t eager to fix them.
“… on a site this big and this complex, it is impossible to predict how even the smallest changes might affect the bottom line. Fixing the wonky images, for instance, might actually hurt Plenty of Fish. Right now, users are compelled to click on people’s profiles in order to get to the next screen and view proper headshots. That causes people to view more profiles and allows Frind, who gets paid by the page view, to serve more ads. “The site works,” he says. “Why should I change what works?”
My sentiments exactly!