By : Kristie Painting
No single innovation has democratized our world more than the Internet. With no more barriers to entry than a laptop and something to say, personal websites have flourished. And while the thrill of seeing your words writ large in cyberspace holds an undeniable appeal, many armchair publishers seek a greater dream of their achievements being recognized with monetary reward. But the vast majority of websites are never monetized. However, if financial gain is part of the game plan, here are a few vital requirements.
First and most important: content is king. This is true now more so than ever before, as demands on consumers’ time become ever more staggering. If your goal is to hold users’ attention, and compel them to return, you’d better have something meaningful to say.
Here are some key questions to consider. Is there an audience? Not all content is created equal—for yours to stand out, it has to be relevant and well-written. Is it unduplicated? Make sure that what you have to say hasn’t already been said hundreds of times around the world. Is it fresh? Users may visit once, but if you want to compel them to return, you have to provide a reason. Content must be refreshed, and users must know when that has happened. Is it 'sticky'? Does your website draw people in, only to lose them seconds later? Make sure that your content is engaging and draws users further into your site. This leads to high user engagement, which is a valuable metric within the advertiser space.
The true value of creating a valuable content site, however, lies in its ability to build a scalable audience. Without scale, it is very difficult to monetize a site, regardless of its content. Smaller sites can join an ad network, where they may be grouped appropriately, and have ads run across the site. In those cases, CPMs and sell-through rates tend to be lower, and the overall size of the opportunity is limited by the size of the inventory. However, once a site builds an audience with scale, a few things happen.
Your site will start ranking on industry measures such as comScore Media Metrix, and advertisers start taking your calls, or start calling you themselves. You can move away from just monetizing your site through ad networks, and look for opportunities to represent your site as a stand-alone property. This represents the chance to capture a larger portion of an overall ad buy, rather than just a piece through an ad network. More importantly, with scale comes the opportunity to build custom sponsorships and integrations. These may require resource-intensive redesigns, hard codes and/or editorializing – and there’s no way this work will be justified without the revenue associated with scaled inventory levels. One final note on scale: be absolutely confident in your technology solution’s ability to grow with your audience.
Google can teach the rest of the world a thing or two about scale. Granted, it fulfilled the first part of the equation by getting into the market first, creating a search engine before anyone else had really thought about it, and piggybacking on Yahoo’s growing audience to build its brand. Then, of course, it wrote a killer algorithm that worked better than anyone else’s. But now, it has scale. This means that it can sell millions of search terms at pennies a click, and still post multi-billion dollar quarterly earnings.
Facebook is another great example. Having generated 35 billion pageviews worldwide in October 2007, it has made two things possible. First, it can leverage the volume of its page impressions to generate significant revenue by running direct-response ads against a cost-per-acquisition target. But more importantly, it has created a vast community that allows it to build multi-million dollar integrations for brands to talk directly to its consumer base. While this model is still unproven, the lesson here is: without scale, it’s not possible to build it, let alone make money from it.
However, not everyone can be Facebook. Building massive scale is, by definition, reserved for only a few online giants. So how’s a new website to get by? Let’s go back to Economics 101. Bearing in mind all of the initial points about content, start by looking for niches that are in low supply and high demand. This strategy allows a site to charge higher CPMs for its content, and drive revenues with smaller levels of inventory.
Let’s look at a few examples. Objective automotive sites, with strong content that attracts auto enthusiasts and car purchase intenders, experience extremely high sell- through rates and command excellent CPMs. Automotive advertisers are aware that consumers have selected their vehicles long before they ever step onto a dealer site, and recognize the value of positioning the messaging in front of these key buyers early in the process. And with only 1.5 million new vehicles selling in Canada each year, they are prepared to pay for the opportunity to intercept that decision-making process.
Another great example is the emergence of environmental issues at the forefront of society. Despite the focus on 'green' issues, good quality environmental content can be very tough to locate online. The result? An increase in its value – advertisers will be willing to pay premium prices to reach consumers with a timely message that resonates with their environmental concerns. In short, find a niche or gap in the online space where advertisers want more inventory than there is available, and you will find an opportunity to generate revenue.
Finally, but equally as important, is the functionality and design of your website. When building your site, take the time to look at other sites and think about design, functionality, and advertiser requirements. Your site must work, navigation must be clean, and the design must be appealing to users. Remember that you will have to appease advertisers to attract advertisers. This means including standard IAB ad units, ad placements above the fold, and a willingness to support rich media. There are many advertisers who will not buy any ad unit that falls below the fold. Factor that into your design thinking at an early stage. You should also consider what kind of integrated opportunities you are comfortable accepting, both from an editorial perspective, and a design perspective. Build those opportunities into the site at the outset so that you don’t require a complicated redesign down the road.
Also, consult with professionals in the field. If you are just starting out, working with an ad network allows you to outsource your sales effort to professionals who are already in front of agencies, instead of trying to compete with them. This might translate to an ad exchange, or a semi-transparent network at the outset, and graduate to an advertising representation house as your site gains unique users and media profile. Or, if you decide to retain an in-house sales staff, invest in capable sales professionals to represent it in its best light, and negotiate the appropriate market rates for the inventory.
There is more to website monetization than If I Build It, They Will Come, but by following a few basic maxims, the road to success is fairly straightforward. Build interesting, unique content that either creates a mass market, or a desirable niche market. Make your site beautiful, functional, and advertiser-friendly. Then, take it to market with confidence, and enjoy the fruits of your labour.
Kristie Painting is Director of Sales at Olive Canada Network