Should I Try Direct Ad Sales On My Website?

This is part 4 of a 4 post series about direct sales and web display ads. Many website owners are benefiting from or considering selling ads on their sites directly. But direct sales can be confusing and it isn’t right for everyone. The posts:

1. The Two Types of Web Display Ads: Premium vs Remnant
2. Why Direct Sales Is A Great Way To Sell Ads
3. How isocket Powers Premium Ad Sales
4. Should I Try Direct Ad Sales On My Website?
   

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It’s Not For Everyone

Selling premium ads is not the best idea for every site on the web. Whether you want to conduct outbound direct sales or inbound self service, there are some basic factors that will impact how successful you are and if you should even make the investment to try.

So that I feel better about spending all that time and money on getting a Business Economics degree, allow me to present a very complex technical graph:

However, there are no hard rules – it’s more art than science and it’s a sliding scale. If you’re already conducting direct sales, either by hand or with a service similar to isocket, then it’s a no brainer. If you want to start selling premium ads here’s some criteria to consider:

1. You can invest the time and effort to make direct sales work.
2. You’ve had people email you saying “I’d love to buy an ad on your site!”
3. You have ideas for new / valuable advertising options.
4. You have the level of traffic and audience an advertiser would want to buy.

Can You Make The Investment?

Although isocket makes it a lot easier than it used to be, selling premium advertising on your website, whether it’s outbound direct sales or inbound self-service, is an investment of your time and energy. Even if you plan on using the self-service model exclusively, which is a “set it and forget it” type service for the publisher, it still takes more time and attention than using AdSense.

It takes time to get everything set up. You have to set up your ad zones, implement our ad tags on your website or in your ad server, create your inventory packages, fill out your profile, etc.

Then, once you start selling ads, you have to approve each order before it goes live on your site, answer any questions or bids you’ve received from potential buyers, update your traffic numbers, keep your content fresh, etc.

Most importantly, you need to actively promote and sell your inventory. After all, it’s called direct sales for a reason – you are selling your “product”, which involves making people aware it exists, making it easy for them to find (perhaps via an advertising page on your website), and contacting potential advertisers.

But You Still Need The Traffic

Think about it: if you run a blog that is read by 14 random people and your mother, would an advertiser make the effort to buy an ad directly? Your best option in that case is an ad network.

There is no hard limit on minimum traffic, and isocket doesn’t have a magic number we use to screen potential customers. However, we do believe that a rough rule of thumb is to have at least 50,000 page views per month.

We have run across publishers with less traffic than this that are successful with direct sales, but they usually offer something else that is valuable, such as a highly targeted audience. Or it could be a unique situation where you only get 10,000 unique visitors per month but they are a very engaged audience that generates 200,000 ad impressions, etc.

Does Size Really Matter?

When it comes to premium ad sales, yes. From an advertising buyer’s perspective, it has to be worth it for them to put the time and money into making a direct purchase. We discussed some of these reasons in the second post of this series.

Let me put it another way: you wouldn’t drive an hour to buy a McDonald’s hamburger that was $1 off. It may be a mighty tasty and efficiently priced burger, but the effort didn’t warrant the reward.

This is why premium advertising has been a privilege of the larger websites. If an advertiser is going to be making calls and sending checks anyway, they may as well buy from the biggest sites they can. In other words, an advertiser would rather make 5 phone calls to 5 websites to purchase ads that will reach 5 million people, as opposed to making 500 calls to 500 websites that will reach 5 million people.

The graph above represents the audience size of websites, ranging from the #1 site on the web to the last. The shaded blue areas show that the total audience size of the top 50 websites might be the same audience size as the last 500,000 websites combined. It’s a bell curve, and it’s the graph that spawned terms like “the long tail.”

The Floor Is Dropping

An important trend is emerging. The “minimum size” of a website that can successfully sell premium ad space is dropping. In other words, if a couple of years ago you needed to have at least 1 million page views to successfully sell a premium ad, today you might only need 100,000.

This change is happening for a couple reasons. First, the dramatic rise of small and middle sized ad buyers spending their ad dollars online has increased the demand for “middle class” advertising (as opposed to big budget advertising, like on CNN.com). The other reason is that tools like isocket are making it easier for more groups to try direct sales without the huge development or staffing costs.

Try Us Risk Free – Plug In Your Existing Ad Network

If you think you meet the criteria outlined in this post and still want to try premium ad sales, great! We wanted to help people try direct sales without risking the money they are already making. One of isocket’s features is the ability to daisy chain our service with your existing ad networks. If you’re already using a network like AdSense, you can put their ad code into isocket, so that while your premium ad is waiting to be purchased we will display your AdSense code.

You can read more about how isocket powers premium advertising in the third post of this series and sign up for a beta invitation on our homepage.

TechCrunch Picks isocket For Direct Ad Sales

We are very excited to announce and welcome TechCrunch as the newest addition to our private Beta! Just in case you are new to the internet, TechCrunch is one of the largest, most influential blogs in the tech and start-up world and is read by over 2 million people per day.

We are honored that TechCrunch would choose isocket to power their ad sales. They see a lot of technology companies and had their pick of the litter, so their faith in us was humbling and motivating. You can read their announcement about isocket here.

If you’d like to be a part of our private Beta as well, you should sign up for the waiting list on our homepage! We’ll be sending out invites on a first-come, first-serve basis in the coming weeks and months.

You should definitely take a look at TechCrunch’s ad sales pages. Here is the direct sales page on their website and here is their isocket profile / Media Kit page. They are also offering a 20% launch discount on all their ads! If you make your purchase during the month of May, you can apply this discount to any campaign through the end of 2009!

One of the coolest things that the TechCrunch team wanted to accomplish by moving their ad sales onto isocket was to make it easier for more advertisers, especially start-ups, to have the chance to advertise on TC.

Since isocket makes it easier to buy and sell advertising, TC is able to offer more options, including new ad packages that run for a day. For example, you can promote the launch of your startup or product by purchasing all of the premium ads on TechCrunch’s main page for one day, and all it takes is a few clicks on isocket (you can watch a video sneak peak here)!

We’d like to thank TC head hacker Henry Work for sourcing and championing us, Heather Harde for giving us the chance, and Michael Arrington for supporting startups both on and within TechCrunch. Laguna is pretty awesome too. They work hard over there but have a great time doing it.

How isocket Powers Premium Ad Sales

This is part 3 of a 4 post series about direct sales and web display ads. Many website owners are benefiting from or considering selling ads on their sites directly. But direct sales can be confusing and it isn’t right for everyone. The posts:

1. The Two Types of Web Display Ads: Premium vs Remnant
2. Why Direct Sales Is A Great Way To Sell Ads
3. How isocket Powers Premium Ad Sales
4. Should I Try Direct Ad Sales On My Website?
   

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Selling Your Own Ads Is Tough

So selling your own premium advertising can be a great thing. But going at it alone can be very difficult – conducting direct sales as a publisher is a time consuming mess. It’s very manual – emails back and forth, invoices, etc.

On average, publishers who are trying direct sales spend up to half their time on the administrative overhead behind ad sales, or the “nuts and bolts”. One of our beta testers described his daily routine as “hand to hand combat.”

We’re one of the new tools that makes the processes easier and quicker. Plus we’re the only one that is commission free and built for flexibility and customization.

Outbound Direct Sales vs Inbound Self Service

There are two ways premium ads get bought and sold. One is outbound direct sales, where the seller is actively trying to push his inventory by pitching to potential buyers “you should buy ads on my website!” The other is inbound self service, where a buyer initiates the purchase by coming to the seller and saying “I’d like to advertise on your site!”

Let’s take a look at a typical inbound scenario:

1. Buyer is browsing a website and is interested in advertising on it.
2. Buyer goes to the “advertise page”, such as xyz.com/advertise.
3. The advertise page tells the buyer that they need to email advertise@xyz.com for more info.
4. There’s a back and forth of emails where the buyer is asking questions, trying to figure out what is available to buy, the price, etc.
5. Buyer and seller agree on a deal. Seller creates an invoice for the buyer and emails it to them. Buyer sends payment via check, PayPal, etc.
6. Buyer emails their banner ad to seller. Seller takes the file and puts it into their ad server, manually creating a campaign based on what the buyer wanted.
7. The ad runs. The buyer can’t see what’s happening or change their banner image, so they email the seller to see how much of their order has been filled.
8. The seller emails a report to the buyer once the campaign is done.

That doesn’t sound like much fun. It’s a very tedious, time consuming, manual processes simply to sell a banner ad. Lots of independent moving pieces and things that have to be kept track of. Think about it – an ad buyer has to jump through hoops to give you money that they wanted to spend on you!

isocket Makes It Easier

Rather than tell you what we’re doing, we thought it’d be better to show you! Here’s the first public look inside isocket (a 4:45 video screencast).

Here’s some of the key features highlighted in the screencast:

• More options – isocket helps you sell any kind of ad inventory, including web display banners, email and RSS.

• More control – Create your ad inventory the way you want to – you can set the price, duration, details, etc.

• More money – Why are you still paying 30% commissions? isocket charges a low monthly fee. On average, publishers that switch to isocket are saving up to $1,000 per month!

• More transparency – Because we’re commission free, we don’t try to hide who you’re selling to or buying from.

What Do You Think?

Our goal is to build you the best ad platform around! The best way to do that is by listening to you. Tell us what you think of the sneak peak into isocket or what features you would love to see! You can also connect with us on twitter.

Improved Socket Creation

In our effort to keep moving from “functional” to “usable”, we just made some significant changes to how sellers can create advertising opportunities / inventory (what we call “sockets”) and make them available for purchase.

One of our challenges is building a system that can represent every major form of advertising. It’s a balance between making one process that is broad enough to cover everything from banners to billboards, yet making it simple and powerful enough so that you can quickly build exactly the type of inventory you want to.

For example, if you are selling a web banner, you shouldn’t have to go through a physical location / geographic step. We’re also working to reduce the number of duplicates, such as demographic info on both your group and socket.

We’ve taken the familiar tabbed form boxes from your dashboard and used them for creating sockets. It’s a 3 or 4 step process, depending on which ad type you sell.

We’ve also limited the types of ad inventory you can create during our private Beta. Yes, we still support all forms and will open the list up in the future,  but we’re focusing on the core ad types for now. You can always select “other” if you’d like.

New Design Sneak Peek #4: Activity Icons

This week’s sneak peek into the new design going up next month: activity icons. Our goal is to provide more “one click” functionality to the socket listings and give the user more control and information on their dashboard pages.

In most of the places where ad inventory is listed (such as the Active Sockets list on your dashboard), each socket will have status / activity icons.

These activity lights are small icons on the right of the socket listing that will brighten when certain actions are required or something important has happened. For example:

• When a question is asked
• An ad copy needs to be approved
• A private message is received
• A buyer requests renewal

New Design Sneak Peek #3: User Profiles

Continuing our sneak peeks at the new design / version being rolled out next month, here is what the new user profile page looks like. This is the page external people see when viewing your account.

We wanted to highlight your role, history, group and brand memberships, and of course the ad inventory you’re managing.

Click to enlarge. Comments welcome!

New Design Sneak Peek: Newsfeed and Tabs

Big design changes coming over the next month! One of our goals is to make it easier to manage your accounts across different groups/brands/websites.

Here’s a sliver of the new account home page. The account home is still unique for each group you’re a member of. It brings the newsfeed up front and account management tabs behind it.

Let us know what you think (click to enlarge):

Data On The Web Display Ad Market

The first application built on the isocket platform is a direct sales application for web display ads. In simple terms, its a tool for website owners to sell banners on their own without using an ad network. This is what most of our current private Beta testers are using – in fact, you can see two demonstration ad spots (125×125’s) in the right column of this blog.

This “economic crisis” has caused a lot of discussion about the decline in the ad market and what 2009 will be like. There are a few areas, like newspaper and radio (see tomorrows post about this topic) that have really tanked.

In the online ad market, some doom and gloom predictions talk about a decline of 1 or 2%. The average prediction is that the market will grow only 2 to 3%. While that looks bad when compared to the 20% or more growth web ads experienced over the last few years, 2% growth in this climate is still growth.

What we wanted to highlight is that it’s not always the top-line market numbers that are important, but the shifts happening within that market.

Venture Capitalist Fred Wilson wrote a great post about how display advertising works differently than search. The important part:

The basic insight from the report is that display advertising does not normally result in an immediate click. That makes sense because the ad is not being presented in a moment of purchase intent, like a search ad is. But the ad does create interest in the product or service which is realized at some later date in the form of a site visit, a search query, and possibly on online or offline purchase.

This jives with a study that showed display advertising metrics may not capture all of the value or results.

A Specific Media study finds the presence of display advertising significantly affects click-through and search style across both paid and organic searches. Findings suggested consumers exposed to display ads are more likely to search for brand terms (like “BMW”) and segment terms (like “635 CSi”) than unexposed ones.

A new report called “No Improvement on Horizon for Standard Online Advertising” outlines the minimal/flat growth over the next year. But look at the two graphs associate with that post:

While everyone is focused on the top-line decline, advertisers that want to reach “local” audiences are spending more than ever before.

“Local” should include niche, targeted and small business advertisers – they all want to buy display advertising, but don’t have the budget or the need to buy national level campaigns. Direct sales, where an advertiser and a website publisher work together to buy/sell an ad, is the best way to achieve this.

But “local” advertisers still have a hard time with web ads. As buyers want more narrowly targeted display ad audiences, they will need an easier way to purchase those ads.

And that’s exactly what isocket does. Our service makes it easier for those “local” buyers and sellers to connect and conduct these more narrowly targeted campaigns, without all the mess and hassle that usually comes along with it.

New Feature: Website Metrics Box

A few weeks ago we introduced a new modular Socket page that would allow for custom extensions.  These extensions will give additional information about the advertising opportunity.

The first one out the door is Website Metrics; a website metric mashup using API’s from various ranking and analytic sites.  The Website Metrics extension will show ad buyers info from the web’s most popular ranking services in one box.

You can find thousands of posts discussing if web rankings and page ranks are even of value.  We believe each number by itself is only a piece of the puzzle.  To make a proper decision about a web property or piece of inventory, you need it all: stats, metrics, audience, profiles, ROI analysis, and your gut. When in doubt, more info is always better.

Extensions (could also be called widgets, plugins, etc) will start to play a more important role on the Socket page in the near future.  If you have any additional thoughts or suggestions on extensions that we or you could build, let us know.

Website Metrics:

• Alexa Rank: (alexa.com) Alexa computes traffic rankings by analyzing the web usage of millions of Alexa Toolbar users and data obtained from other, diverse traffic data sources.  Alexa comes up with their rankings based upon this data.
• Google PageRank: (google.com) Google assigns a numeric weighting from 0-10 for each web page on the Internet and denotes a site’s importance in the eyes of Google. The PageRank of a particular page is roughly based upon the quantity of inbound links as well as the PageRank of the pages providing the links. 10/10 is the highest ranking.
• Compete Score: (compete.com) Based on the daily web usage of web surfers with the Compete Toolbar installed, Compete calculates and estimates total traffic and rank for nearly every site on the web. They use the data collect to create a score to ranking sites accordingly.
• Technorati Rank: (technorati.com) A Technorati Ranking relates to the number of sources that point to a particular blog relative to other blogs. The more sources referencing a blog, the higher the Technorati ranking. The Technorati Rankings better represent blogs, or high content sites.
• Delicious: (delicious.com) Delicious is a social bookmarking web service for storing, sharing, and discovering web bookmarks.  The number displayed is the number of times the URL has been bookmarked on delicious.com.
• Inbound Links: (yahoo.com) Yahoo inbound links count the number of times other websites link to a particular URL.  The higher the count, the more influential the website.

New Design Sneak Peek

We’ve been tooling away at a new design and wanted to give you a sneak peek. You’ll start to see the changes in the Beta over the next few weekly releases.

It’s not a radical change – it will be familiar yet vastly improved. Our goals were to improve your experience by putting the more important information up front and reorganize some UI stuff in ways that made more sense. Oh, and some nifty effects too.

A tip for you fresh designers out there: AJAX and fancy UI effects can be overdone. That’s why our first designs didn’t have a lot of it implemented. Wait until people are actually using what you have so you can see what processes could should be streamlined, where it really makes sense to add a shadow box, etc.

Here is a sliver of the new socket page. Let us know what you think!

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