Four Simple Steps for Online Publishers (and Magazines) to Increase Revenue
ROI is the number one concern on advertisers’ minds. Ad dollars reveal precisely that priority. According to the IAB, performance-based media accounted for 57 percent of Internet advertising revenues in 2008 and is expected to increase significantly this year.
Not surprisingly, demand for greater ROI has resulted in a fall of eCPMs. Pubmatic’s AdPrice Index Quarterly Report shows that eCPMs experienced a 27 percent drop in third quarter of 2008 (from Q1). Performance pricing models offer publishers an easy way to alleviate the strain of price erosion and maximize their online advertising revenue by tapping into the enormous advertiser demand for increased efficiency and transparency.
With the following four steps, online publishers can leverage current market opportunities and seamlessly incorporate performance marketing alongside existing CPM/CPC advertising.
1. Monetize inventory within the existing site framework.
Redesigning a site to incorporate a new advertising pricing model is unnecessary, not to mention costly and time consuming. Publishers can easily integrate performance advertising into an existing site in two ways:
a) Monetize the registration path.
Through co-registration advertising, user data is collected during a site’s registration process and, with the user’s consent, passed on to an advertiser. The user signs up for the advertiser’s offer simply by ticking a checkbox. Due to its immediacy and contextual relevance, co-registration campaigns deliver high response rates and are in high demand. It’s a win-win-win situation for advertisers, publishers and consumers. Advertisers benefit from high conversion rates; publishers benefit from advertiser demand for quality leads, increased eCPMs and additional ad revenue; consumers benefit from a more relevant online experience.
b) Implement performance display banners in standard IAB sizes.
By rotating performance banners alongside CPM inventory, publishers have new ways to monetize existing inventory. According to IDC, lead generation is one of the fastest growing segments in online advertising with 71 percent year-to-year growth. Because CPL banners are available in standard IAB sizes, you can take advantage of this additional revenue and incorporate CPL banners into your existing inventory seamlessly. (No matter which way you choose to integrate performance advertising into your site, make sure you command a fair price by leveraging the strength and specificity of your site’s demographics, and strategically offering premium and custom fields for capturing lead information.)
2. Avoid the exclusivity trap.
Sometimes, networks and vendors offer to implement performance-based advertising on a publisher’s Web site in exchange for exclusive representation of that site. These exclusive relationships should be avoided. By relying on only one partner, publishers limit the number of advertisers they can work with (a critical mistake in this economy) and lose control over the quality and relevancy of their content. Content attracts audiences; audiences attract advertisers. Allowing exclusive access has the potential to undermine the quality of a site’s content which, in turn, can cause a decrease in perceived value by advertisers. Instead, look for openness and transparency when evaluating partnerships.
3. Automate campaign management.
To boost revenue and lower costs, operational efficiency is critical. Save technical resources for billable and highly specialized work. Media operations teams should be able to handle implementation, delivery, and optimization on all types of campaigns, regardless of pricing model.
4. Connect with new advertisers.
The final step is to connect with new advertisers. Demand for performance media is well established. However, finding advertisers should be a concerted push/pull effort:
• Push: Have your sales team sell performance advertising to new and existing clients along with CPM and CPC advertisements.
• Pull: Get listed on open and transparent directories so that advertisers who are looking for performance media opportunities can find you easily.
As pressure to provide stronger ROI increases, publishers are challenged to go beyond traditional CPM/CPC pricing structures. By following these four steps, publishers can easily incorporate performance advertising into their existing sites and start to see increased revenue and better user experiences.