by Niall Douglas. Last updated . This page has been accessed 14,016 times since the 3rd March 2008.
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year (2008) my web hosting provider doubled his hosting charges, and to
be honest he was the last of his competitors to do so as my provider (lchost.co.uk)
is techies-only and thus has very low overheads so long as you're happy
with no more than a Unix shell prompt. Web hosting in 2008 in the UK is
now a minimum of £60 a year - we can thank the new European legislative
requirements for keeping months of access logs (supposedly for
anti-terrorism purposes - hah!).
However it has turned my mind towards getting this web site to pay for itself. Back when it was first online, nedprod used to have adverts but I never made much money from them - this was back in 1998 and advert providers tended to go bust about as quickly as it took for your advert revenue to hit the minimum payout amount. However, I still had all the machinery in place, so I knew it wouldn't take long to re-add them.
A LOT has changed in the last ten years. I found I spent most of this past week reading all of the internet about how to do advertising, because the good old days of $5-$10 per 1000 impressions are long gone. As the mainstream advertising industry has come onboard, there has been huge price pressure and prices are vastly lower than they used to be - equally, there is massive proliferation of advertising with many blog & search engine pages being 80-90% advertising on the page, which obviously greatly reduces the value of advertising to the advertiser, so to be honest this is what Economics calls a "tragedy of the commons" problem where each actor self-optimises to the detriment of their peers.
Despite these longer term trends, there have been major changes in web advertising just in the past year (2007/2008). Google Adsense used to pay very well, but as competitors have caught up with contextual advertising products, Google has very much lost its lustre. Also, just recently Google like most others has stopped with the CPM (Cost per Thousand Impressions) model and gone with CPC (Cost per Click) and increasingly CPA (Cost per Action) which substantially changes how websites should do advertising - and all this has happened just in the last six months!!!
This page attempts to sum up what I have learned during the past week in the hope that it helps others. I'm not doing it purely for altruistic reasons - I am strongly hoping that this page becomes the most visited page on how to monetise your website on the entire internet, and I am thus hoping that you dear reader right now are earning me a few cent. Thank you in advance, and I hope you find this content useful!
Before we begin ...
I should firstly warn you about a few things. Firstly, the following advice is for small websites (less than 30k unique visitors per month) - if you're bigger than this, you should sign with the big advertisers directly and if you're bigger than 100k per month, you should probably directly sell your advertising slots by inviting your readers to place adverts and/or using an advert auctionhouse like Etology.
Secondly, the following advice is for non-commodity websites ie; like this one. What do I mean by "non-commodity"? Well, I mean those many personal websites which contain just the ramblings and assorted crap of some individual or other and aren't obviously targeted at some sellable item or other. For example, if you're gay and you write even just a few times about gay issues, you'd be FAR better off advertising gay-specific adverts than following any advice on this web page. Or if you're into skydiving, or model trains, or any form of habit or hobby which someone somewhere could sell stuff to people like you, go for the niche advertising.
This obviously means that if you're looking to develop content purely as a money earner, it's a FAR better idea to generate hits, links & references which are very closely aligned to the best earning advertising topics. Before you think you should email me to ask what those slots are, I'll tell you now: I DON'T KNOW, so don't bother asking - but see below about the stats on ad share spend in the US. Furthermore, like most things, advertising campaigns tend to follow fads & fashions, so you gotta learn to be flexible and bend like the reed in the wind.
No, this webpage is purely about getting your personal bit of the internet to pay for itself, no matter how random & pointless your crap is (and this website is pretty random & pointless). This therefore means you won't be writing anything which helps earn you money, just kinda hoping you can generate a fraction of a cent per visitor and that will generate about €60-70 a year.
How it all works
You sign up with an advertiser as a publisher by filling in a form on their website. After a few days, they will accept or reject your application after checking your website for suitability. Note also that many advertisers (especially the big four) won't accept any website with less than 50k unique visitors a month - but don't worry, there are ways around this by going via a middleman who takes a cut of your earnings for getting you access to the big four (more shortly). Just for reference, the big four are Google (google.com/adsense), Yahoo (see below), MSN and AOL (advertising.com) and they take 88% of the total web advertising spend in the USA. Outside the US though, things are very different regionally.
There are four main ways of adverts paying you: Flat Rate (they just rent the space for a day/week/month etc), CPM (per thousand impressions), CPC (per click), CPA (per action eg; when a visitor clicks and then buys whatever product the advert was selling). Obviously enough, CPM pays the least, CPC more and CPA lots more - but also obviously enough, getting visitors to buy whatever the advert is selling is extremely tough. And oh - you're not allowed to ask, incentivise or require visitors to click on or purchase anything, and there are robots scanning your pages run by the advertisers and they'll cut off your account if they find anything (this is usually automatic, so even by talking about it like I am right now can accidentally invoke getting cut off).
As this page is about websites whose visitors will rarely, if ever, click on any advert within them, we're obviously going to focus on CPM and to some extent, CPC. We'll be ignoring flat rate (my site is of no interest to most advertisers), revenue share (I don't make enough revenue to make it worthwhile) or CPA (no one visiting this site would ever really click an advert). If you ran a site which reviewed say lampshades, you'd really want CPA all over the shop as they tend to pay a percentage of the sale price. Even on this website, many of the people visiting the Multiple Intelligences Test will happily pay for an online IQ test so I do have Google Adsense based CPA earnings just for that page, though most of the earnings are from CPC.
Most of the smaller advertisers pay some range of rates for CPM or CPC and will specify these in their FAQ or publishers section. The larger advertisers simply do a "revenue share" system where you get between 10-70% of whatever the buyer pays them. Of course, you have to trust that they really are paying you this proportion because there's no way of finding out.
Lastly, eCPM means "effective CPM" and it's a way of converting CPC and CPA into CPM. Basically, you simply divide the CPC + CPA earnings by total impressions - you'll see this on Google Adsense a lot. Of course, it's not TRUE CPM because CPM pays whether the visitors click or not - also, eCPM is unstable because some months you'll get lots of clicks (eg; run-up towards Christmas), other months you won't - whereas page views per month stay fairly constant. What you really want is a dual CPM and CPC system which pays well for both - this is precisely what the larger advertisers tend to do, whereas the smaller ones it's either/or.
Now how it doesn't work!
Of course, it sadly isn't as easy as just inserting some HTML and money starts poring in. Here are the big problems with the above:
All these issues will greatly lower your earnings - so much so that it's pointless to take the naive approach ie; choosing an advertiser and sticking with them when they'll be trying to screw you out of as much earnings as possible. What you need is a better way ...
Niall's better way
What us small website owners need is a way of beating the system outlined above. We need some mechanism that serves ONLY adverts that pay, keeps CTR high for the CPC ads, and prevents PSA ads wherever possible. As I mentioned above, I mostly ignore CPA advertising completely given the small, non-commodity website like this site nedprod we have in mind. [see above for the acronym explanations if you skipped the earlier part]
Now I spent a lot of time investigating options for this - a custom PHP script was the most obvious, and indeed there are several out there which can be programmed - however, you need a full GeoIP database (this maps IP address to their geographical location) on your webserver and the lite edition is some 80Mb! I only have 200Mb of space, so I needed another option.
After a great deal of searching and testing options, I initially settled on Right Media Exchange which is owned by Yahoo (however I changed - see below). This is basically an auction house for advertisers (of which there are many), so you register your website and then request links with various partner advertisers some of which are part of the big four - the cost is you won't get the full commission because Right Media take about a 10% slice. However FAR more important is the "third party networks" section - and this part is UNIQUE amongst advertising auction sites - because you can add your own advertisers.
In other words, you can go sign up to a long, long list of advertisers, each of which may offer excellent (> $1 CPM) rates but only for very limited geographies (eg; just Australia). You then feed in their details and eCPM rates to Right Media Exchange and then set the geotargeting and frequency (eg; 1 time per unique user per 12 hours). Right Media Exchange then doles out the best paying adverts to each visitor in turn, and even if your visitor visits multiple pages on your website, Right Media Exchange will keep handing out adverts until it has exhausted all its options, after which it will display any advert of your choice - simply add a custom advertiser (say called "Foo") with each of the advert sizes you serve and have the tag being something like:
<div style="width: 728px; height: 90px; border: thin; border-style: inset; text-align: center;"> <span style="color: #ff0000;"><b><br /> Hello! We seem to have run out of adverts for you or your country. Thank you for visiting nedprod.com, we're glad to see you here!</b></span> </div>
Set the CPM to $0.01 and it'll show that rather than some silly non-descript PSA. This is more useful than it looks - it proves Right Media Exchange is definitely working as advertised, but it also shows if your fill rate isn't 100% because you want to see zero impressions in all ad categories. Via this trick, I recently discovered that nedprod's popunders were being fully utilised and therefore I needed a supplementary popunder provider.
This has four big advantages:
It does however have one big disadvantage:
So first thing you should do is open an account with Right Media Exchange, add your "Foo" zero CPM custom provider and place their advert slots on your website - you don't need to bother with adding custom advertisers for now, because before anything else you need your visitor's geographic profile. I would immediately request a link with all the big advertisers on the Link page as they take over a week to approve (or deny) your request. Oh, if you think I'm being paid to promote them, feel free to search Google and find any better alternative out there - and email me with it, and I'll happily change this HOWTO.
Run with your "Foo" empty adverts for three or four days to get a good profile. Just for reference, here are the advertisers currently available for direct linkage in Right Media Exchange: Kitara, Revenue Science, Xtend, Directa Networks, Bannerconnect, Active Response Group, Adtegrity, CPX Interactive, Remix Media (Right Media Networks), Oridian, Rydium, Vizi Direct. I give my experiences and eCPM of each below.
Just as a side note, Google are in the process of launching their Ad Manager service which does exactly as Right Media Exchange does except maybe better. However it's still in beta and is currently invite only - so, for now, I don't cover it here.
Niall's Better Way Mk. 2
Something weird happened towards the end of August 2008: Direct Right Media were busy taking care of my advertising and the money was rolling in, though annoyingly into separate accounts each of which had a minimum payout. However, as is usual during the summer months, the eCPM remained high while the revenue dropped quite noticeably as the number of web site hits dropped for the summer months. Then suddenly CPX Interactive emailed me to say that they were cutting off my account because my volume was too low - this effectively halved my revenue as CPX had been my biggest earner.
This basically meant that Direct Right Media had to go. All my earnings were sitting at around US$20-30 each account (making a total of over US$100) yet they were all untouchable - it was wasted revenue. The last six months of advertising had been for nothing!
By this stage, the Rubicon Project was accepting public applications. They are basically an identical concept to Direct Right Media except with one, very important difference: they bill the advertisers for you and combine all the revenue into one, single payment to a paypal account. This makes a VERY big difference.
I switched over about a week ago and it mostly works. There are bugs: the 728x90 leaderboard just won't earn any revenue and seems to mostly be blank whenever I visit the site - this is despite it being my best earner with every other advertiser. Also, they keep displaying US dollar product prices to me despite that I live in the UK which shows shoddy geotargeting. The revenue is also about half to a third of what it was with Direct Right Media, and the web interface is very buggy - it often forgets that I am on the site and just starts displaying blank pages which requires a logout & login to reset. So all in all, it has problems.
However, on the plus side, the combined payments appears to be working and actually getting paid a third of the revenue is better than nothing. So, it's good for now. I've tried replacing the 728x90 with a 300x100 and we'll see if that works around their billing bug.
nedprod's geographic profile
Taking the last four days of data off Right Media Exchange, my visitor's geographic profile looks like this (29th Feb 2008 to 2nd Mar 2008):
I think it's fairly obvious now why most webmasters and advertisers simply ignore anywhere outside the US! Obviously nedprod is English language only, but most of Western Europe's educated classes have good reading English - the simple reality is that despite poor broadband availability in the US, American citizens spend an awful lot of time on the Internet compared to anyone else in the world.
This now tells us what advertising to bother about: 70% is covered just by US/UK/Canada but we can up that to 89% just by adding in Western and Eastern Europe. Thus, we now know for which countries to go searching for specialised custom advertisers. This is the key - watch your demographics, and find and add customised geotargeted advertisers wherever it makes sense.
Some interesting advertising facts
I thought that some of you may find some facts about advertising interesting - say for example you do have a commodity website, knowing where the advertising bucks go would be very useful. Note all of the following are for the US only.
You will find that certain banner sizes earn more than others. Here's a list from one provider:
Furthermore, the very traditional 300x250 advert tends to earn less than a skyscraper. Bear all these in mind when choosing your advert sizes!
Cashing US Dollar Cheques
What I am about to say applies to UK residents only because I don't know the situation elsewhere.
Watch the bid/spread difference like a hawk! This is the difference between the buy & sell price which banks use to charge you a few percent commission on the transfer whilst pretending it's commission free! To calculate, simply average the buy & sell price, then subtract from the buy price and divide by the average price. This will give you the hidden commission - some banks are as low as 0.5%, others as much as 5%! Worse still, some banks even vary them over time (according to "expected volatility" apparently!).
Transferring Money from one place to another (eg; Donations!)
Depending on the kind of website you have, you may be able to persuade people to buy you a beer or a coffee. Certain kinds of blog, especially if humourous, are particularly suitable for this kind of monetisation.
As we all know, the primary way of moving money around the internet is sadly Paypal whose parent also owns eBay. They really don't care about their customers much - if your account gets hacked (they frequently do) and money stolen (again, frequently) then tough titties for you. They have also stolen money from me several occasions in the past, have high transaction fees (especially high if a currency conversion is involved) and are generally speaking crap. Search Google if you want to hear lots of horror stories. Currently for UK residents, Paypal charge 3.4% + £0.20 per transaction if in Sterling, 2.5% + 3.9% + £0.20 if foreign currency. Quite frankly, that's appalling
Sadly, almost everyone in the US will only use Paypal and nothing else because they aren't familiar with anything else - and as noted above, US citizens will be the biggest proportion of visitor for most English speaking sites. There are better alternatives nowadays - Moneybookers is especially popular in Europe and is far cheaper especially for foreign currency conversions and vastly (in fact, annoyingly so) more secure. In particular, Moneybookers will happily present a native language interface to most non-Western as well as European peoples - the unfortunate limitation is that you must create & verify-by-email an account before Moneybookers will let you send money to anyone. Moneybookers currently charges just 1% of the transaction amount up to a maximum of €0.50 - and it charges this to the sender, not the receiver. It adds a 1.75% charge if foreign currency - as you can see, this shows just how extortionate Paypal are.
A new entrant to this field also requiring an account creation & verification is Google via Google Checkout which charges 1.5% + £0.15 for UK residents, 2.0% + $0.20 for US residents. It performs no foreign currency conversion at all, so the sender's bank does the conversion and charges whatever it charges (usually 2.5% for most banks, but it'll be hidden in the exchange rate). I think that most US visitors would prefer giving their bank details to Google than Moneybookers, but Paypal will still be the most recognised.
A really new entrant is Amazon Payments, but they are so new they are US only for now. When they expand to the UK, I'll add more here.
However, Paypal does have one upside - they accept credit & debit card payments without the person having to open a Paypal account beforehand - this is only because unverified credit card use is illegal in every other civilised nation on the planet, so no one else will provide that without you (the merchant) having to fill in several forms and register them with the financial services regulator first.
One BIG problem you'll find when running multiple E-money providers is moving money between them. It turns out that the solution is dead easy - simply go to www.moneyswitch.com and after verifying your identity, you can move money between accounts for low charges. Enter 'ned14' as your referrer when signing up if you appreciate this tip. This can save sending and recharging via a bank account with all the associated clearing waits and fees.
How do you integrate Paypal, Moneybookers and Google Checkout payment into your website? Well, the Paypal code looks something like this:
<form name="_xclick" action="https://www.paypal.com/us/cgi-bin/webscr" method="post"> <div><input type="hidden" name="cmd" value="_xclick" /> <input type="hidden" name="business" value="THVBALDNCU2DU" /> <input type="hidden" name="item_name" value="One coffee or beer for Niall" /> <input type="hidden" name="currency_code" value="GBP" /> <input type="hidden" name="amount" value="3.07" /> <input type="submit" name="submit" value="Buy Niall a beer/coffee (£3.07) via Paypal (also takes debit & credit cards)" /> </div></form>
This is the standard Paypal code except upgraded to be XHTML compatible. You may be puzzled with the "business" field - it contains some random numbers and letters instead of the destination email address! Why? Because I don't want spammers deluging me with spam, and it turns out that you can hash your recipient address - not that the Paypal website tells you this anywhere.
Where do you get this code from? Well log into your Paypal account, click on "Referrals" at the bottom of the page. In the middle it will show you your referral link which looks like this: https://www.paypal.com/uk/mrb/pal=THVBALDNCU2DU. Simply replace your email with the pal= code.
The Moneybookers code looks like this:
<form action="https://www.moneybookers.com/app/payment.pl" method="post" target="_blank"> <div>If you prefer Moneybookers, type <img src="moneybookersaddr.png" class="style12" /> into <input type="text" name="pay_to_email" value="<here>" size="32" /> then click<br /> <input type="hidden" name="language" value="EN" /> <input type="hidden" name="amount" value="2.69" /> <input type="hidden" name="currency" value="GBP" /> <input type="hidden" name="detail1_description" value="(at St. Andrews, Scotland prices)" /> <input type="hidden" name="detail1_text" value="One coffee or beer for Niall" /> <input type="submit" value="Buy Niall a beer/coffee (£2.69) via Moneybookers" /> </div></form>
This hassle of having to display the email as an image and have the user type it in is sadly unavoidable without running through a CGI script. Shame they couldn't copy Paypal's unofficial feature.
Now here's the bit that most of you probably arrived at this webpage looking for: a current list of advertisers and their pros & cons. I have added in quite a few features which no other list of advertisers has such as a subjective rating, which ones are currently in use, and most importantly how much I personally earn from them. With all the gotchas, caveats and other ways they try to screw publishers, max CPM or CPC rates mean nothing in a real world scenario. Note though that your site may gain far more from CPC than CPM than mine, or maybe even vice versa - but at least you have a real world guide unlike most other lists. Also, I'll be keeping this up to date as the situation changes so please revisit! You may find this other website full of advertiser listings useful.
I have included advertisers who rejected my application just for reference but obviously I don't know anything about them. I have placed various current rumours about various advertisers that I have gleaned from posts made since Jan 08 - but no warranty is given express or implied that any of these rumours are true.
BTW an Interstitial is one of those very annoying full page ads that pops up in between moving around pages on a website. I personally find these SO annoying that I don't use them anywhere on nedprod - though in a few places I do use some popunders due to the very high CPM. Also I have completely left out those horribly annoying popup boxes when you move your mouse pointer over a double underlined word - I HATE those, and would never help anyone suffer them.
Niall's Ratings are purely subjective and are based on (in this order): (i) Earnings (ii) Low Min Payout (iii) Ease of Use (inc. paypal option, non-stupidity of website etc). I disable any advertiser not paying me at least US$0.12 eCPM after a week - the market average is about US$0.25-$0.30 for untargeted ads right now.
Last updated: Friday 2nd May 2008. If it's much out of date, chances are the info won't be much use.
PLEASE NOTE THAT THIS SECTION IS NO LONGER UPDATED SINCE AUGUST 2008 AS I HAVE MOVED OVER TO USING THE RUBICON PROJECT. YOU CAN ADD CUSTOM ADVERTISERS TO THE RUBICON PROJECT BUT I HAVEN'T BOTHERED.
By the way, most of the links to the advertisers contain my referral link (ie; I get paid if you sign up). If you liked this page and thought it was useful, then please use the links in here. If not, then feel free to google each advertiser and skip me getting my commission. Totally up to you!