Tag Archives: digital media

Advice for startups on how to make money from online advertising

Over the past few months, a number of Canadian online media startups have asked me for advice on how to make money from online advertising. The most common question I get is “when does it make sense to start selling ads on my website and how do I do that?”

Since so many digital startups want to know, I thought it would make sense to provide some helpful steps to take and options to consider:

1. Determine your monthly unique visitor traffic
Typically, advertisers (and their agencies) won’t be interested in buying premium ads on your website until you’ve hit a certain traffic threshold. That threshold may vary depending on how niche your content is. However, I would suggest that 50,000 unique monthly visitors is likely a good benchmark.

Until you reach that threshold, I recommend thinking about alternatives like sponsorships, content integration, affiliate partnerships, barter deals, and Google Ad Sense instead. See my notes below on  these opportunities.

Advertisers usually want  to see data from third-party online media measurement companies, rather than your back-end data from Google Analytics or Omniture. In Canada, they typically look to comScore Media Metrics for that data. In the US, they will look to comScore, Neilsen or Compete. If you cannot afford to purchase reports from these companies, DoubleClick Ad Planner gives you a good third-party estimate of your traffic.

2. Calculate what your traffic is worth
I would recommend that you calculate the potential advertising revenue of your website before deciding whether it’s time to start selling ads directly to advertisers. This will help you to determine the cost benefit of putting a lot of resources behind selling, managing and reporting on ad campaigns versus selling sponsorships, working with Google Ad Sense or being represented by an ad network.

A quick way to do this is to look at the total number of pageviews that you have on your website. Then, estimate the number of ad units that you will have on most of your pages. A good estimate is roughly 1.5 ad units per page (because you may have one or two premium ad units on a page, plus one or two additional ad units that may not be in a premium position).

A lot of publishers use an average CPM of around $12.00 to do their estimates. That is because there will be some ad inventory on your website that could be worth $30.00 per thousand impressions (CPM). However, a lot of it will only be worth $3.00 – $5.00, depending on placement.

Also, be aware that when you are starting out, there will be a ramp up period for getting advertisers to pay premium dollars to be on your website. Be prepared that you may not get your desired premium CPM until there is enough demand for your content.

So, the formula should look like this: (X number of pageviews x 1.5 x 12) / 1,000. This gives you a rough estimate of what your inventory is likely worth and is a good starting point for figuring out your next move.

3. Flat fee sponsorships
If your traffic is currently below the suggested traffic threshold, you may want to consider selling a flat fee sponsorship. That’s because it will likely end up costing you more to do the work to manage the ad campaigns that you sell, than what the advertiser will ultimately be willing to pay for your inventory. I recommend that you charge a flat fee for a sponsorship for all or a particular segment of the content on your website. That way, you can leave it up on your website for a set period of time and not worry about as much manual labour.

If you are planning a special feature or promotion for your website, I recommend that you seek out an advertiser who would be interested in co-branding or sponsorship opportunities, or even possible barter deals. In addition, eNewsletter sponsorships can get you a decent CPM. However, the key is to have a big distribution list. So, start building up an e-mail user base now and get people to opt-in for future e-mail messages from sponsors.

4. Google Ad Sense
There are pros and cons to putting Google Ad Sense ads on your website. The pro is that you can start to make money right away from the inventory on your website.

The con is that it makes it tougher for you to convince advertisers to buy premium ads with you. That’s because they can buy ads via the Google Content Network on your website for a cheaper CPM. You need to decide what works best for you. However, it often makes sense to put your remnant, or unsold advertising inventory into an ad network or ad exchange.

5. Affiliate partnerships
Another option that you can consider is making money for sending traffic and leads to other websites to help them drive sales. This is called affiliate partnerships. If you have very niche content that caters to a specific type of customer (i.e. beauty tips, mortgage rates, etc.), then certain related businesses may be interested in developing an affiliate program with you.

This means that you can potentially share revenue with them from the sale on their website. Or, they might pay you on a cost-per-lead basis. It’s worth investigating potential affiliate partners in the industry in which your website is serving.

6. Ad Network Representation
When you are just starting out, it can be tempting to seek out advertising network representation. Ad networks will also want to know if you’ve met a certain traffic and page view threshold before they decide whether they will want to represent your website. In terms of page views, you’re likely going to be appealing to a direct sales ad network if you have reached roughly 500,000 monthly page views or more (even better if it’s closer to 1 million).

Once again, there are pros and cons to having a larger ad network handle the advertising sales on your behalf.

The pro is that if you do not have the expertise or resources to go out and sell the inventory yourself, you can have someone else handle it while you focus on growing your business and the traffic to your website.

The con is that you will likely have to share up to 50% of the revenue with the ad network. This is because you do not have enough traffic volume at this time to justify a bigger revenue share model for yourself. The ad network will also likely want to sell your inventory along with other similar websites in their network in order to get you onto the advertising buy. This means that they may sell your inventory at a lower CPM as part of a larger advertising deal.

If you do choose to go down this route, it is worth your time to shop around a little to see what is out there.

There are no right or wrong answers for choosing one advertising sales channel over another. These are just some recommendations and guidelines about how you might get started.

I’d love to know what other questions that digital startups have about making money from online advertising. Please leave a comment if you have a question.

Image source: iStockPhoto.com

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Influential Corporate Storytellers in the Digital Space

Typewriter spelling the words "Once upon a time"For today’s post, I thought I’d tackle a big challenge.  I’m going to tell you a short story about corporate storytelling. Corporate storytelling in the B2B technology and digital marketing space has often been referred to as thought leadership.  However, that notion has evolved as new tools and channels have emerged to help you lead the way for new strategies and ideas in your industry.

In order to illustrate the idea of corporate storytelling for B2B Technology marketers, or marketers in any industry for that matter, I thought I’d tell you the story of a few very successful corporate storytellers in the digital media space today.

And so, my story begins. According to Seth Godin, a good story succeeds because it captures the imagination of the audience, is authentic, trusted, appeals to the senses and is rarely aimed at everyone.

There are many great storytellers in the digital space but the following storytellers have somehow managed to bubble up to the surface in my world. So, I would like to re-tell their stories (another sign of a good story is that it is sharable) to you – the audience who discovers this blog.

Gary Vaynerchuck – WineLibrary.TV
If you are a wine lover or social media marketing aficionado, I am sure that you have heard of Gary Vaynerchuk by now. Gary developed a very successful strategy to turn his passion for people and wine into a highly successful business. His story also illustrates the power of using social media to build personal and corporate brand equity.  He developed WineLibrary.TV to bring the art of wine tasting to the masses. Over a few short years, Gary took his family’s wine business from obscurity to mass global awareness. As a result, he now shares his passion to help others succeed in a similar fashion through his book Crush It and by speaking at events all over the world. In addition, he has become so popular for sharing his passion that he has been asked to speak on a number of very popular TV shows including Dr. Oz and Conan O’Brien. One of my favourite examples of Gary’s passion and barrier breaking of wine tasting is his pairings for wine and popular cereal.

Alex Bogusky – FearlessRevolution.com
A recent hero in my world is Alex Bogusky – the big ad agency executive who abandoned his agency, Crispin Porter & Bogusky, to do the right thing after becoming disillusioned with the advertising world. Not only is his new business movement influential, the story about why he chose this path is also very inspiring. Alex co-founded the FearlessRevolution in the summer of 2010 as a new venture that takes a fresh approach to why and how we should be doing business and building brands. He told Fast Company that “the greatness that matters more is the greatness people achieve through helping each other, through collaborating.” Having already successfully impacted the change in the ad world through some of his famous game changing campaigns like Subservient Chicken, Alex Bogusky has now started a movement to influence people to do good in the world. His Fearless Cottage is almost like a drop-in center for people dedicated to setting aside their fears to do the right thing. Organic farmers and chefs, influential teachers, marketers and other fearless professionals participate in his movement through content on the website, via consulting projects and more. Alex Bogusky is, in essence, a storyteller about great corporate stories.

Blendtech – Will It Blend
This example is such a simple one but identifies how to tell a very authentic, sticky and imaginative story that can be told over and over again. The Will It Blend video channel on YouTube illustrates the Blendtech brand promise in a highly engaging, entertaining and sticky fashion. The series of videos highlight the power of the Blendtech blender in a hilarious fashion as they show how their blender truly can blend everything and anything. The videos on YouTube have become so popular that users now contact the company to request products for them to blend on their channel. Below is a video of them blending an iPhone (insert gulp here).

HubSpot – Inbound Marketing Resources
This story may not sound as sexy as the other stories that I have told so far. However, my blog couldn’t be focused on B2B marketing without giving an example of a brand that tells great stories in the B2B marketing space. HubSpot is a digital agency that focuses on helping businesses of all sizes to get found online via Inbound Marketing. HubSpot hosts countless webinars, educational videos and more – where they give away a ton of useful online marketing resources FOR FREE. Giving away free research, tips and insight builds trust with the user and entices others (like myself) to spread the word about their brand. I would highly recommend that you check out their site to learn more about the science of marketing through search, blogs, Twitter, Facebook and more.

There are so many more examples that I could share but these are the stories that have stuck with me lately – even though they are each so very different. So, now that you know how some of the best influential corporate storytellers do it, you may be asking how to get started? Based on suggestions from some of the top storytellers in the business, including Seth Godin, Chip & Dan Heath, and HubSpot, here are some thoughts on where to begin.

Start by listening
In order to understand what kinds of stories will resonate with your audience, start by listening in on their needs and pain points. There are many tools that you can use including the usual Twitter, Facebook, comments on blogs, analytics, and more. Not only should you listen to potential customers, but you should also listen and learn from other storytellers and of course your competitors.

Begin by making your long story short
Mark Twain was once quoted as saying “I would have written you a short letter but I didn’t have time.”  This quote is important because it takes a long time to develop your story which will likely be re-told to others in a quick, 1 minute synopsis. If you want to make sure that your customers get who you are, you need to first identify what your message is going to be and then go to step two to figure out how you are going to tell that story. Before you tell your long, never-ending story, test out your short story first. Test it out internally on employees, friends, etc. Make sure that they can tell it back to you in a way that you would want it to be shared and repeated externally.

Craft your sticky sound bytes
Identify key data points and value propositions that will help you differentiate yourself from competitors and work as a the foundation of your never-ending story. Develop a unique approach to telling that story and determine how can you illustrate your sticky sound bytes in a way that will stay with your audience. A great book which illustrates how to make your story stick is ironically entitled Made to Stick, written by Chip Heath and Dan Heath. Remember that your story will be told and re-told in small, snack-size pieces of information online via blogs, video and more (hence the nerdy reference earlier to bytes).

Identify the tools and channels that you are going to use to tell your story
A few weeks ago, I posted a list of online channels that might work best for telling your B2B marketing story. Determine which channels will illustrate your story and value propositions (i.e. sticky story sound bytes). Don’t forget to include offline story channels including presentations, sales meetings, conferences, PR – and your biggest channel of all which is your employees. Make sure that your employees are aware of the story and are able to share it with their friends and peers.

Develop an editorial calendar and distribution plan
Many experts have said that you don’t necessarily want to plan years in advance in this space as tools, marketing channels and strategies may change. However, planning a few months out is probably a good idea to keep you motivated to keep telling your story.  Kate Trgovac, a great Canadian corporate storyteller in Vancouver, recently posted her blog plan for 2011. I thought that this was a great example of planning out your strategy in advance to ensure that you will stick to it. Also, here is a great example from FlowTown on how to schedule your tweets to promote your small business blog.

Test, measure, learn and tweak
You’ve probably heard this a lot now as online marketing is a truly measurable medium. Nothing changes in the world of corporate storytelling. Determine which metrics you will use to track your success and make sure that measures are put in place to monitor and learn from those successes or failures. The only outcome will be an improved product as you hone your craft.

This is the end of my first story on influential corporate storytellers. However, I hope that this post inspires you to start crafting your own corporate story today.

Inspiration – Digital-Savvy Canadians to Watch in 2011

Canadian Flag

Image by magnaen

Since this is the first week back at work for everyone in 2011, I thought I’d share some inspiration for Canadian digital media companies and professionals who want to kick some serious butt this year. Here are links to blogs and articles about the Canadian digital media companies and professionals that we should keep an eye on in the digital space in 2011.  I often come up with a blog post idea and discover that someone else has already covered it.  In this case, I have decided to aggregate the lists of notable Canadians rather than write one myself.  However, it is still very early in the year and I’m sure that there will be many more notable Canadians to brag about in a few months.

Maybe these lists will inspire you or your company to become notable for 2012 – or even make the re-cap lists of the best digital media companies and professionals in Canada at the end of 2011.  Good luck to all of the Canadian companies who are showcasing their products at CES in Las Vegas! Who else do you think needs to be added to these lists right now?