Publishers operating on the World Wide Web are slowly beginning to understand what it takes to help their advertisers succeed in the online medium. After all, most Web sites expect, in the long term, for advertising revenues to pull most of the weight. Publishers must learn how to assist their advertisers in getting the most out of ad placements online -- if they expect companies to continue to advertise online.
In the recent past I've written about a New York start-up, Real Media, that serves to place online ads on multiple Web sites. The company currently is focusing much of its efforts on the newspaper industry. Real Media ads are placed on a number of newspaper Web sites, such that an advertiser can easily buy a certain geographic area, and pay for a specified number of impressions (when a Web site viewer sees an advertiser's banner) or clickthroughs (when a viewer actually clicks on an ad banner).
Real Media has been operating for a couple months now, and CEO and founder Dave Morgan now has some real-world experience with success ratios for ads placed on multiple online newspaper Web services. You'll want to heed advice based on his findings.
It will come as no surprise that ads placed on a Web page that appear within the first screen that a user sees get higher "clickthrough" rates than those placed by the publisher further down on a page (requiring a viewer to scroll down to see it). Ads placed by Real Media on newspaper sites that are within that coveted first-screen space are getting clickthrough rates of 3.5-4%, says Morgan. The rate for those placed below the first screen: a dismal 0.5%.
I've noticed many newspaper Web sites putting ad banners at the bottom of their home pages, but I wonder how many of these sites' managers keep track of clickthrough rates for those ads.
Placing ad banners "low on the page" probably comes naturally to print-trained people now running Web sites; in the print world, you don't typically put an ad on the front page or cover of your publication. (Certainly there are exceptions, including Editor & Publisher magazine, which sponsors the Web site this column resides on.) But the Web is a new medium that requires different approaches. I would suggest that Real Media's numbers indicate that you may need to get over that old no-ads-on-the-front-page bias. You have to do everything you can, within reason, to let your advertisers have a successful experience online. If their ad efforts on the Web fail, your site may fail, too.
Refresh ad banners often
Morgan also discovered from analyzing his statistics that ad banners drop off in clickthroughs after several days. When a new banner appears, the ad is likely to see 5-7% clickthrough. After five days with the same banner, the rate drops to 2-3% -- and gradually drops off further over time.
This is an obvious finding, if you think about it. Yet many sites run the same ad banners for weeks or even months. This may be the advertiser's fault, but publishers need to be pro-active in urging advertisers to come up with new banners frequently. A rotation of banners, each with a different look, is what's called for.
Morgan says Real Media is starting to work with advertisers to build sequences of constantly changing banners. For a Web publisher, changing ad banners every week or few days can be an administrative hassle, of course, particularly if the the site is not hosted on an in-house server. Real Media handles that aspect of ads it places on multiple newspaper sites, and Morgan says he's willing to handle publishers' locally sold ads as well, administering the change-over of multiple banners if the publisher agrees to participate in the Real Media ad placement program (which is non-exclusive).
Banner size affects ads' success
Here's another one that you'd expect. Wider ad banners -- typically either 468 pixels or 500 pixels wide -- are clicked on significantly more than smaller ones. "If I was an advertiser, I'd demand that size banner," says Morgan.
Publishers might not want such large ad banners because they take up so much screen "real estate," of course. Or they don't fit in with how a site has been designed to accommodate advertising. But advertisers, as they become more savvy about Web advertising and look at the stats, will be demanding larger banner sizes, Morgan says. If it's important to you that your advertisers succeed, you may want to accommodate them.
Consistent banner dimensions needed
Several standard online banner dimensions seem to be prevailing on the Web, Morgan says. 468 by 60 pixels is the most widely used; a number of Web publishers are selling 125 by 125 pixel placements; and 300 pixels wide banners are showing up frequently. Because advertisers more and more will be placing on multiple sites, it's important for individual publishers to be able to accommodate these standard-size banners. Don't expect an advertiser to alter its banner just to fit in with your Web site's design.
Morgan says he's seen some unfortunate examples of what not to do. Some Web sites have taken to shrinking an advertiser-supplied banner in order to fit a site's self-imposed ad placement template. The result can be illegible type for the banner, and an advertiser who's angry about the treatment it received.
Of course, sometimes you'll receive banners of oddball sizes. There's no hard and fast rule for dealing with these, and at times you may have to ask the advertiser to reconfigure its banner to a standard size. The best advice may be simply to think through this issue before it comes up, so you won't be caught unprepared.
Banner sizes: Demand small ads
In terms of size of ads placed on your Web sites, do require that advertisers submit small banners -- no bigger than 10K, maybe even 6K. Emphasize to your advertisers the importance of their banner appearing on screen quickly and discourage use of large ads.
An unfortunate trend lately is the appearance of animated banners, which take up slightly more room than static images. But Morgan says that if done correctly, even the animated banners can be kept under 10K. Whether these animated banners are "cool" or an irritant to users is still up for debate. I tend to view them as more irritating than interesting; I often find myself wishing I could click on one of these animated ads to "shut it up."
What advertisers want
Web publishers need to experiment with different advertising strategies, Morgan emphasizes. Companies that are placing ads on the Web today are not yet spending a lot of money, but nevertheless their online placements are important to them. These companies want to figure out how to make online advertising work, and they need publishers' help to do so.
Straight sponsorships (flat monthly fee) on Web sites are pretty much out for most sophisticated national advertisers, Morgan says. They want to buy "impressions" (the number of times a banner is seen by a Web user accessing a page containing the ad), and more and more advertisers just want "clickthroughs." For local advertisers, however, the sponsorship model may still be acceptable -- particularly if you can guarantee a minimum number of impressions during the ad contract.
Cost per thousand dollars (or CPM) for impressions ranges from $10-15 on the low end to $40-50 at the high end (i.e., marquis sites with tight demographics). Morgan says he's seeing these rates drop slightly as more publishers launch Web sites that are advertiser supported, and ad agencies become more demanding as a result. The competition for Web ad banners is tough, and getting worse from the publisher's perspective.
The next trend emerging is advertisers' demands to pay for clickthroughs rather than impressions. While you can certainly offer it either way, remember that with clickthroughs, the response rate -- and thus your revenues from the ad -- are dependent on the effectiveness of the advertiser's banner. If the advertiser does a lousy job and few people click on the banner, that's out of your control. What you as a publisher do have control of is the rest of your site; you have control of getting users to visit your pages and thus see an advertiser's message. That's what you should be getting paid for.
Some analysts believe clickthroughs are the holy grail of Web publishing. Rosalind Resnick in the latest issue of her newsletter, Interactive Publishing Alert, says, "To steal a line from the last (U.S.) presidential election, it's the clickthroughs, stupid. Pageviews (also known as impressions) are history -- at least, for online publishers that lack the traffic of an InfoSeek, Lycos or Yahoo. ... The closer a publisher can bring an advertiser to an actual sale, the higher a CPM the advertiser will be willing to pay."
I think Resnick is overstating it that impressions "are history." Certainly clickthroughs are important -- very important -- but as I stated above, publishers should be loathe to put the revenues they will receive from online advertising solely in the hands of the advertiser, who may or may not come up with a banner compelling enough to get people to click on it. Publishers absolutely should still be selling impressions -- perhaps combined with clickthroughs. A discounted CPM for impressions might be offered, with a per-click fee paid on top of that, for example. A straight clickthrough revenue strategy makes little sense without a reasonable minimum guarantee of what the publisher will receive from the advertiser.
The major advertisers only get excited over gross numbers, notes Morgan. "If you can't deliver at least 50,000 to 100,000 impressions per day, you're not playing with the big boys," he says. The only way for smaller newspaper publishers to compete for advertising dollars then, says Morgan, is to aggregate impressions from multiple newspaper Web sites.
Contacts: Dave Morgan, email@example.com
Rosalind Resnick, firstname.lastname@example.org
Leonard Forman has been named senior vice president for corporate development, new ventures and electronic businesses at The New York Times Co. Forman is a former executive of the Times Co. and has spent the last 10 years in television, computer online services, print media and advertising for Telemundo, Nynex/Newsday, the Newspaper Association of America, and the Newspaper Advertising Bureau. He will coordinate the Times' online efforts as well as video programming.
Just in case any of you were expecting me to report on yesterday's announcement by New Century Network, please note that I covered some of the key points of the NCN presentation in my Friday column. You'll find reporting of the NCN announcement in many other media, so I won't repeat them here. I will make an effort to interview NCN's new CEO, however, and hope to follow up on this important newspaper new media venture.
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