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.

Why Direct Sales Is A Great Way To Sell Ads

This is part 2 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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Have you ever seen a website with an “advertise here” page, typically something like photojojo.com/advertising/? Are you unhappy with your ad networks and think you could be making more money if you sold your ads yourself?

Bottom line: selling your own premium ad inventory can lead to a big boost in your business – and not enough websites are trying it or doing it well.

Remnant advertising via networks and exchanges is very popular, and they definitely serve a purpose / fill a need. We believe that remnant ads are a good thing but not the only or even best thing. Like most things in life and business it’s best to have a balance between remnant and premium, and finding the right mix can do wonders for your advertising.

The problem is ad sellers / web publishers started focusing on ad networks as their main source of ad revenue. After all, it was quick and easy! You put some JavaScript on your website and BAM!, Google starts magically sending you checks. As the industry focused on building ad networks and exchanges to meet this demand, relatively little progress was made with premium ads and tools that support them.

Premium Ads Make More Money

When you’re selling ads, you can usually figure out how much money you’re making from your ad inventory by measuring eCPM, or effective cost per thousand impressions. When you’re using ad networks you often earn an eCPM of less than $1.00.

Ads that you sell directly can be sold for higher prices – or in other words, you can sell them at a “premium” (get it?). The average difference in pricing for what is essentially the same ad space can be as high as 10X! That means you might be getting paid $1 per thousand impressions by a network when the same ad spot sold as a premium ad could have brought you $10.

Here’s a recent and controversial MediaPost blog that shows some of the direct sales vs remnant pricing math. Regardless of the math’s merits, it’s good people are debating the topic.

Why The Big Price Difference?

Because the buyer is getting things they can’t get when they buy remnant ads through a network or exchange. After all, ad buyers aren’t stupid or willing to throw money away – but they will pay more for a better product!

Some of the direct sales benefits to ad buyers:

• Transparency – One of the problems with remnant advertising is the buyer doesn’t know where their ad is going to show up. It’s a kind of “spray and pray”. They trust Google to put the ad in the “right” places for the “right” price. When buying a premium ad directly, they know who they are buying from, what they’re buying, how much it costs, etc.

• Control – Because of the transparency, buyers have more control over their premium ads. They can intentionally pick where the ad goes, what types of packages they want to buy, for how many days/weeks/impressions the ad will run, etc. They can more directly analyze the ad’s performance and optimize accordingly.

• Relationships – Direct sales usually occur between people, not algorithms. Having a person you can talk to and build a relationship with is a great thing with tons of benefits. For example, some sellers have given the buyer feedback on their ad creative / banners by saying “we know our website visitors really well, and we think they would love it if your ad talked about XYZ feature.”

• Simplicity – Depending on the type of advertiser, direct ad purchases can be easier. Think of a small or medium sized ad buyer who has been spending most of their money on radio and print ads – those are direct purchases and it’s what they are accustomed to. As more of these buyers spend money online, they don’t all want to learn or deal with the complexities of networks and exchanges. Sometimes it’s easier for them to email a website and say “I’d like to buy an ad on your site for a month. Here’s my money.”

Remember the brick and mortar store example from the first post in this series? There’s value for the buyer to see and touch the product, to talk directly with the shopkeeper about what’s right for them, etc. There’s a level of personal touch and customization. You can’t get that when you buy a billion impressions from a thousand websites via a network.

There Are More Benefits For Sellers, Too!

Premium ads and direct sales isn’t just about making more money. Many publishers use direct sales because it’s a better fit for their business and how they want to spend their time. Many of the benefits listed above for buyers are also mirrored as benefits for sellers:

• Relationships – Sales is about relationships. You can drive a lot of repeat and profitable business when you maintain relationships with your advertisers.

• Business Control – Rather than relying on a third party that might not have your best interests in mind, many website publishers want to have that control over all aspects of their business. There’s something empowering about being the sole determiner of your success with ad revenue.

• Inventory Control – You have the flexibility to try different things, such as a unique new form of advertising. Some sellers like to bundle together different ad packages, such as an option to buy a daily homepage takeover or a mixed campaign of banners, text, RSS and email. Although we don’t always recommend it, unique inventory options can be a good way to offer unique value to your advertisers.

• Advertisement Control – You can control the advertisements that show up on your site. You don’t have to worry about ads for competitors, porn, gambling, herbal supplements, etc. Web publishers spend a lot of time and effort to give their users a great experience through quality content and design – why clutter that up with irrelevant or inappropriate advertising?

• Money Control – Sometimes an advertiser will contact the seller to make a direct purchase, but the seller has to send them to a third party service to fulfill the order. But if the buyer contacted you directly and it’s your inventory, why send it off to a broker who will take 40% of what you rightfully earned? Plus you can control how and when you are paid – no more waiting 3 months for a check in the mail!

So How Do I Do It?

In the next post of the series, we’ll walk through how direct sales typically works, what’s wrong with it, and how isocket helps make it easier for you!

Let us know in the comments which of these benefits you like most or if there any reasons we might have missed? Would love to hear what you all think of premium direct sales.

The Two Types of Web Display Ads: Premium vs Remnant

This is part 1 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?
   

__________________________________________________

There are two types of inventory when it comes to website display (i.e. banner) ads – premium and remnant. Understanding the difference and how it applies to you is crucial to making the most out of your advertising revenue and strategy.

From a technical view, there is no difference between a premium ad and a remnant ad. They are the same shape and size, the advertisement (called the “creative”) could look identical, they both count as an impression every time they are seen, and they both link to the advertiser’s website. Mike Nolet, formerly of Right Media, has an excellent series of posts with his opinion on this subject.

The basic difference between premium and remnant is how the ad was bought and sold. Premium ads are sold by a seller/publisher directly to a buyer/advertiser. Or in other words, an advertiser bought the exact ad they wanted from the exact website they wanted.

Pretend you own a brick and mortar store… you do some local marketing about your products, a customer walks in, you chat about what they are looking for, they pick the product they want, they pay you, and they leave. It’s a 1 to 1, face to face relationship. That’s direct sales and premium ad inventory.

Remnant ads are sold by someone else, where your ad inventory was pooled together with thousands or millions of other websites and sold to a buyer you’ve never met. Remnant ads are “leftovers”. Almost all ad networks put remnant ads on your website. The biggest network AdSense (created by our own Gokul Rajaram) is a perfect example.

Let’s say only 30% of a website’s available ad inventory has been purchased directly by an advertiser. The other 70% of inventory could a) show no ads at all or b) show ads from an ad network. The thinking is you may as well show remnant ads, because some money is better than no money, right?

The problem (as you’ll see in the next posts) is that even though remnant ads are easy to use and usually make up the numerical majority of a website’s ad impressions, they are usually not your only/best option.

ad:tech San Francisco Lifts Up During Down Days

Last summer we  attended ad:tech Chicago, and it sucked (old post: adtech Chicago Underwhelms). This week was San Francisco’s turn. Ad:tech SF is usually a bigger show than Chicago, but we weren’t sure what to expect given everything that’s happening in the ad and tech industries.

I was pleasantly surprised as I spent two days meeting people, customers, partners and anyone with a booth. I wanted to highlight some of the things I saw:

• Given all that’s happened in the last 6 months in the macro economy and the ad industry, I expected the conference to feel gloomy and the conversations to focus on “what’s wrong.” Not the case. People were energetic and still talking about innovation.

• Unlike previous years, many of the bigger booths were manned by the company’s CEO. That’s the right thing to do in this climate. They are best suited to listen and feel the customers on the ground and adjust accordingly.

• One of the good things about this downturn is that a lot of the me-too companies will go away. They were still out in full force this year, but you can tell they are struggling to justify their existence. Their departure will clear the way for the next wave of companies and solutions to rise.

• The industry doesn’t need more lead gen companies or vertical networks targeted at tween female saxophone players. Booth after booth had the same message “we deliver the best ROI on your ad dollar!” – sorry but no, no you don’t.

• At the recent IAB conference, one of the opinions you heard again and again from both buyers and sellers was “we don’t feel like we’re any better off than we were in 2001.” Everyone  was talking about what the next big thing could be and what problems they want solved. There is still lots of room to innovate in advertising!

Zak will be attending the TRAFFIC domain conference next week, let us know if you’ll be there!

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.

"Godfather of AdSense" Gokul Rajaram Joins isocket Board

We are excited to announce another world-class addition to the isocket team! Two weeks ago we welcomed Ex-Googler David Scacco. Today we’re announcing another Ex-Googler on the isocket Advisory Board – the man who lead the creation and growth of Google’s AdSense.

Gokul Rajaram joined Google in January 2003 and served until November 2007 as the Product Management Director for AdSense. He earned the nickname “The Godfather of AdSense” for leading one of the most disruptive cash cows in the business.

Gokul received the President’s Gold Medal as Valedictorian of IIT in India. He also has an M.S. in Computer Science from UT Austin and an M.B.A. from MIT. At Google he helped drive a number of acquisitions, including DoubleClick, AdScape and dMarc. He’s currently the head of Chai Labs, a stealth startup.

Here’s a “where are they now” piece from Fortune Magazine about Gokul.

Please join us in welcoming both Gokul and David to our project!

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!

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