fipp.com December 2007 | Magazine World | 19
digital
advertising
MAKING MONEY FROM
ONLINE ADVERTISING
As online publishing matures in the Web 2.0 era, the
opportunities for advertising revenue multiply. Justin
Morshead explains how to make money out of digital ads
the consumer. It is important to understand that as with the channel specialist
far as the user is concerned, advertising is content 4. There is little or no mechanism for bringing on
and needs to be pertinent to a site’s audience. existing print advertisers into the mix.
The long-term effects of inappropriate search or The last issue of migration is a worry for those
display advertising on a site will be degenerative with offline products. Should we abandon print
to traffic. Conversely, appropriate advertising will relationships – valuable as they are – or make an
create a virtuous circle of more traffic and spend. attempt to urge print advertisers into a new model?
Display advertising does not drive traffic but non- The final choice for non-display advertising is to
display has the possibility of increasing traffic. bring parts of it in-house. There are overheads and
Publishers have three choices for non-display caveats to this model. The publisher does need one
revenues. They can control advertising in the same or two members of its ad sales team to understand
way as they have done offline; outsource space the online model and be prepared to embrace new
to channel specialists or use a search marketing revenue ideas such as cost-per-click and cost per
company to supply third party advertising. acquisition. Above that, it needs a clear strategy of
U
S online advertising will hit $61 Google’s Adsense and Yahoo!’s Content Match providing contextuals at the consumers’ point of
billion in 2012, according to industry supply contextual ads onto publishers’ pages. interest supported by a browsable marketplace of
consultancy Forrester Inc. In the It takes little time to do a deal and have the ads products and services that support the brand.
UK, the Internet Advertising Bureau up and running, so for publishers seeking a low- It is worth pointing out that none of the
(IAB) predicts the market will reach £2.75 billion maintenance solution, these products are ideal. three options – the search engines, the channel
(US $5.73 billion) this year. In the same way However, this model is potentially the lowest specialists or the in-house – are mutually exclusive.
that Microsoft dominated the 1990s, Google is earner and drives the least consumer satisfaction. The modern publisher will shape ad content from a
beginning to dominate this decade by helping Apart from abandoning the brand to the search variety of sources to create the best revenue return
consumers explore vast quantities of available engines’ content, there is little or no control over and the best consumer experience.
information to find what they are looking for. which advertisers might appear on site, nor on the
The vast majority of Google’s revenues are from revenue that can be made. Justin Morshead is a co-founder and chairman of
search advertising, response-driven marketing that The next model is the usage of channel Adprecision, a search technology company based in the UK.
is attracting substantial revenues from businesses specialists to create content and drive revenues. He can be reached at justin.morshead@adprecision.net
that pay per click. As internet advertising begins Here, site owners use specialist companies
to overtake print advertising in volume, it is clear to supply content and advertising for specific
that the publisher’s lunch is being eaten largely by channels. Decisions about which provider to use
THE JARGON
search engines. depend on content quality, earning potential and
For those of you not knee-deep in online
We can rue wasted opportunities as much as appropriateness to the publisher’s brands.
advertising, here are some defi nitions to
help you through:
we like, but the key now is to compete again for ad This has been an area of great success for the last
spend. To do this, publishers need smart thinking, three years. Valuable and easy revenues of varying
CPC – cost-per-click. The way that Google,
capital spend and the ability to experiment with scales have been driven out and the channel
Yahoo! and others charge advertisers to
different models. specialists can largely be pasted onto the site with
appear in their search pages
For the last three years, most major advertisers very little management overhead. However, as
have been working with a combination of online publishing management takes a closer look at what CPM – cost per thousand page impressions.
display ads, search ads, contextual ads and cost is going on, some issues become apparent: The way display advertising is traditionally
per acquisition deals to find the right mix for their 1. There is an eventual dilution of the publisher’s
charged on the internet
money. Publishers, too, need to move from the brand as consumers become aware they are being
safety of display advertising to understand the sent to another service provider
CPA – cost per acquisition. In this model,
the advertiser only pays if an item is actually
revenue implications of each channel and work out 2. There is still no control over the content
bought. Tracking software tries to ensure
the mix that is right for their sites. 3. Publishers cannot ask a premium for their
fair play.
Any decision-making processes need to include brand from the advertiser and must share revenue
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