Increase the average value of advertising inventory (fourth of nine parts).
& l ~$ i, p/ | J' G+ NWe saw in previous parts of this series that important aspects of building ad revenue is growing site presence and the proper selection of advertising vehicles. Neither of these pursuits, however, makes the biggest difference in the publisher's advertising bottom line. ; L A$ A' v: q9 x# s. {
7 u$ e& N5 V' t* {3 m; A) u) }, `It is the inherent value of your advertising vehicles -- collectively, the ad inventory -- and the ability to sell that value-added inventory that can really boost profit margins. The general value of advertising inventory is set by the market, but a publisher can use various methods to increase their inventory value to levels that are well above this market price. 8 b8 T1 |, O# z1 W
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Many publishers speak of the "80/20" rule, whereby 80 percent of revenue is generated by 20 percent of inventory. Three main categories of ad inventory value building are:- |! e# h* ^# F7 V
1 I1 a* }9 K6 G( dAudience segmentation and targeting.
1 c/ G) e: j( }. t Y; M$ MThe ability to easily traffic and report on any type of rich media. 4 f, H. ~, \# N5 o8 z& V7 z$ P
Optimization of graphical banner layout and ad unit size.; n; J# M: S! a8 \& W" H: y+ d
The first way to build inventory value is technology-driven audience segmentation and targeting. More focused targeting makes the inventory more attractive and valuable to advertisers because you are accurately defining the audience to whom their ads will be shown based on something that is known about the users, what those users are looking at or what those users are looking for. When a publisher has the tools to create and sell audience segments and place the right ads in front of the right people, the baseline value -- or the average effective CPM value -- for each ad vehicle will increase.
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Regardless of the skill of the salesperson, if they are peddling inherently lower-value inventory, the revenue that is generated will also be lower. Of course, when segmenting your audience, high traffic and ad impression volume is important because the more finely you define the audience, the larger the total user pool you need to come up with enough sellable inventory.( ]: G# H/ f+ u" P" q+ i
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Topic-driven focus
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The most basic inventory segmentation is done by establishing sections of a publisher's site which fall into related topics or within distinct areas of interest. For example, some sites could have pages that contain information about various different geographic areas or have pages that are international, national or regional in focus. / j/ ]" ~: X- `7 Q5 ?4 e! O
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Another common segmentation practice is to break down a site by specific content categories such as sports, weather, technology, real estate, shopping, travel, etc. This targeting by topic or geographic location of interest to the viewer can then be a higher-value advertising campaign opportunity. Try to be innovative and creative when forming a site's targetable content categories.3 y3 t# u8 W* R) I* B; R6 J
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Search term targeting; J( o. F" D, C( C
5 r" A/ a; X9 e5 t8 ^' k' FA second type of inventory segmentation is the use of ad server technology which provides targeting based on a visitor's stated interest (search term keyword) or the actual page content at which the visitor is looking (contextual keyword). Search term keyword targeting is ad delivery based on a term or phrase that a visitor submitted in a search for information. Search term targeted ads are attractive because the ads are relevant to something the visitor is trying to find. - s) ]7 a; p# s) j, z
+ S+ @9 _" ]3 K5 rMost publishers do not nearly have the search term entry volume to enable their own in-house sales of search terms, so they utilize keyword ad networks. This approach is very effective because a site can easily use these networks to tap into a large pool of advertisers who are buying keywords that would be otherwise unavailable to the publisher. Search term targeted ads can either be displayed as "Sponsored Results", which are text-based advertisements appearing within the search results text, or as graphical banners shown in the graphical ad banner inventory space on the search term results page. : X+ g7 [# j3 c6 T$ b' C
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Targeting in context
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Contextual keyword targeting is ad delivery based on the text content of the page. This type of keyword targeting works in essentially the same manner as search term keyword targeting, except that the keyword is derived from the page text itself and not from a visitor's stated desire. Keyword lists for contextual targeting can either be generated by "pre-indexing" the site content, or by using ad serving technology which can dynamically analyze the text on each page as the page is built. % ^- \( @7 |% _ p) F
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Contextually-targeted ads are attractive because the ads are relevant to the content on the site's pages. Like search term targeted ads, contextually targeted ads can appear as text-based ads or as banners within the graphical banner ad space. One advantage of using dynamic contextual targeting is that it can allow a publisher to enable an entirely new ad vehicle called "in-text" ads, where actual text within the page's content is transformed into hyperlinks to an advertiser's page. Typically both search term and contextual keyword campaigns are sold on a cost-per-click (CPC) basis.* V& t7 b- ]- ]6 Q. |2 |
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Person, place or action
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% Y" X- s4 U2 W1 _) D8 O. YA final type of inventory segmentation is the use of ad server technology that provides targeting based on visitor attributes such as geographic location, demographic profile, and behavior. Geographic targeting is the delivery of advertisements to a visitor based on the actual location of that visitor. Visitor demographic profile targeting is the delivery of ads based on known user attributes that have been voluntarily given to the publisher by the visitor such as age, gender and income.
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0 r; J( ~' S. H( ?To target to a visitor profile you will need to have an information collection strategy in place and the technology required to set profile cookies and deliver ads based on the cookie contents. Behavioral targeting is serving ads based on the actions a user has previously taken on the site. Obviously, a large and loyal audience is essential to the implementation of behavioral targeting.: q- {* Y* e8 \6 j' s- d6 s. Q
8 m& l( R3 K- h C' w$ oMake it rich
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8 }/ e* s. X$ x5 j! D1 dBesides audience segmentation, another way of building inventory value is to make it easy for advertisers to run more engaging ads such as rich media. Rich media is valuable because it has been shown to evoke more response from viewers. Rich media is loosely defined as coding or proprietary technologies which produce ads that are more engaging or which can allow for user interactivity. Some examples of value-building rich media are Flash ads, HTML ads, video, expandable banners, floating banners, DHMTL ads and cursor ads. ) x6 p8 U4 |1 ^4 ^$ |7 U( w. D
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Rich media should be used with discretion so that it maintains its effectiveness without detracting from user experience, site usability or site performance. This can be accomplished using frequency capping in conjunction with prudent scheduling.
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An especially good way to easily sell lots of rich media campaigns to advertisers is to make a third party rich media creation tool available to them which simplifies and reduces the time to create and set up any type of rich media. A publisher who can offer this tool has the potential to sell more high-value rich media campaigns because the advertiser's costs and development effort associated with rich media is drastically reduced.- E" i3 r$ J) C$ @/ {
" _; N' w# B# rSupersize and optimize6 |9 u7 _3 g. J0 t% _% ~8 Z6 R$ O2 D
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The final way to build ad inventory value which doesn't require audience segmentation is by optimizing graphic banner layout and ad unit size. For example, it is advantageous to use a small selection of large-sized ad units which are commonly sold and which command the highest average value, namely the 160x600 skyscraper, the 728x90 leaderboard and the 300x250 medium rectangle. These larger ad units have higher inherent value and they increase the number of potential advertisers who can run banners on the site and ensure that a publisher has the ad unit sizes for which the majority of higher value rich media is designed. In part eight, we will look more closely at optimizing site content and graphical ad layout design. |