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How to roll out an ads business model?

Does anyone have any good resources to help me learn how to roll out an advertising business model. My site will be content driven, but I'd like to do ads alongside the content as a revenue stream. I am not as educated as I would like to be.

Questions that come to mind:
  • Should we build our own ad server out of the gate? Or are there turnkey options?
  • What can we charge in the early days? Basic display placements? Promoted content? Site takeover?
  • What can we strive to charge long term?
  • CPM? CPC?
Any resources that will help me make these decisions would be greatly appreciated.

6 Replies

Stephen Anderson
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Stephen Anderson Entrepreneur
Executive Vice President Strategy at CLEARLINK
Have you checked out Google Ad Sense yet? Turnkey to get you started.
Shahid Shah
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Shahid Shah Entrepreneur
Shahid Shah is a Government and Healthcare Technology Strategist & Architecture Guru, Speaker, Author, Entrepreneur
In case Stephen's terrific idea doesn't pan out and you want to run your own ad server, check outhttp://www.openx.com/. They have some services as well as an open source ad server. You shouldn't really build your own ad server unless you want to be in the software business.

If you have a solid ad sales team and good size display network you can charge quite a bit; if not, start cheap and grow to be more expensive as your network grows.

The actual amounts are kind of difficult to suggest because I don't know your content very well but if the content is unique and very well differentiated you could actually charge pretty high amounts.

Russ Wallace
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Russ Wallace Advisor
Managing Director, SF at Prolific Interactive
In your early traffic days, you should definitely go with a turnkey solution. AdSense is clearly the biggest, but also check out platforms like BuyAds, BuySellAds, or even InfoLinks. You'll likely find other platforms that pay out more than AdSense.

And if you have great niche content and organic traffic from SEO, then you can't beat affiliate offers or lead generation for business models. The offers or leads you'll want to sell will be highly dependent on what kind of traffic you have, but if your traffic converts, you'll make far more from these monetization strategies than from any ad network.
Lee Senderov
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Lee Senderov Advisor
Start-up Executive, Advisor, Investor
  • Should we build our own ad server out of the gate? Or are there turnkey options?
    Definitely don't build your own. Google DF for Small Business gets you 90M impressions+ for free and is very powerful - you can set frequency caps, geo targeting etc, The only issue I've ever had with it is trafficking various backfill networks but you can make it work for that.
  • What can we charge in the early days? Basic display placements? Promoted content? Site takeover?
    What you can charge - what type of content do you have? For example, social network type of content monetizes at $0.10-$0.15 CPCs (backfill remnant) which Shopping content could be as high as $1 for remnant. I used to see around $15-$20 for tech traffic (electronics) while for clothing/home goods I would see $5 or less so it really depends.
    Basic placements - 300x250 (still pays the most), 728x90, 160x600 and if you can integrate video - do it!
  • What can we strive to charge long term?
    Keep in mind that display inventory continues to increase online so as supply goes up, demand goes down (pretty basic :)) and so do prices. It really depends on what category you're in. To Russ's point, if you can use affiliate, it could prove powerful - check out Viglink for a relatively easy way to set this up.
    It's difficult to say what you can strive for without knowing category and traffic (amount and demographic) as these two will be the biggest drivers of what you can charge.
  • CPM? CPC?
    CPM is the least risky to you, CPC is less risky and CPA is the riskiest because you are depending on your traffic to convert in order for you to get paid, again, really depends on what category you're playing in. Ultimately, as you become more sophisticated, I would actually look at RPM or RPV as your driver because working towards a combination of all three that don't cannibalize each other is the biggest win. At one of the companies I worked at, we had a combination of CPC, CPM and CPA offers on the same page and so we worked to maximize RPM more than anything else.
Hope this helps!
Alan Peters
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Alan Peters Entrepreneur
VP Product and Technology at BusinessBlocks

Speaking as a recovering Ad Industry professional:

Do NOT build an Ad Server unless you are focussing on the ad server business. There are way more industry particulars than you want to deal with.

Use an ad network to start with. Or a few of them. This will git you some fill and some revenue. Later you can use this for backfill.

You'll make more money ultimately by selling direct and by having something that appeals to major advertisers. But you need scale and you'll want an ad sales team.

When you do sell direct, pricing varies widely with a huge number of factors. The biggest are
* the value and size of your audience
* perceived value of your brand
* modality of your users
* types of "Ad Products" you are selling
* various available targeting parameters

If you are trying to figure out what it might look like for modeling purposes, I would suggest a little old-fashioned skullduggery. Find a comparable set of established publishers/apps. Then: find a friend at a media agency (or learn enough about the business to sound believable) and ask them to get some rate cards and quotes for you. Depending on the industry, you can often find the rate cards on their site -- but keep in mind these prices are negotiated .

CPM vs CPC really depends on the kind of ad/advertiser, and CPC usually backs out to an eCPM anyway. Premium brand advertising is typically CPM. Direct response (acquisition) is usually CPC. Everything else runs the gamut. I wouldn't worry about this too much at the moment. If you're using a network (networks), look at what's working best for your revenue and customer experience and optimize accordingly.

Is this mobile or desktop?

Preetha Ram
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Preetha Ram Entrepreneur • Advisor
CEO and CoFounder, OpenStudy
Completely agree on the "Do not build adserver" advice. If you are starting out - google Adsense does a great job to get you going with minimal tech intervention.#next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: [removed to protect privacy] !important; }
There are a few tricks to increase your CPMs.
Size of ad: (300x250) or wide skyscraper (160x600) perform well.
Once you are getting RPMs of $3-5 from Google, you could think of the next steps which may be adservers.
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