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Generating revenue through advertising can be golden; however, how does a network creator manage the advertising real estate?


First...what is advertising real estate? Since there is only so much space on a web page (okay so technically there is nearly unlimited space on a web page, but being realistic, there is only so much that is considered quality space) advertising real estate, is that space that a network creator allocates to advertising.

A few of tips before moving forward:
  1. Too much advertising can take away from the site visitor's experience and too little can be lost revenue. Finding a balance that works for your demographic is key.
  2. Work within your chosen web design. Placing advertising in awkward places on the site just to draw attention can be counter productive. Yes, you may get a visitor's attention, but by diminishing their experience on your site can be a huge negative.
  3. The key to success in advertising revenue is going to be return site visitors. The amount of effort and cost to get a new visitor to your website can be very costly and usually is. Keeping a balance of new visitors vs returning visitors is key. The balance and mix of these two variables is dependent on the site business model. For a social network, heavy percentage on return visitors is a must. If they aren't returning, something is wrong.
Okay, so how to manage the ad space? First, what are the variables that affect ad space?

They are:
  1. Ad size
  2. Ad placement
  3. Ad cost
  4. Ad exposure
In a nutshell there are just four variables to consider. Let's break each one down.

First, Ad size. Ad size is defined by the actual space that the ad will occupy on the web page. Whether placing graphics-based or text-based advertisements, the space requirement should be considered. Banner ads are typically sized by pixels, so for example, a 160x600 banner requires 160 pixels for the width and 600 pixels for the height.

Second, Ad placement. There are many combinations that can be used with regard to ad placement. The typical placement on a Ning network will be the right column. This space will receive the highest exposure because nearly every page on the network will have this column visible. It is also easy to manage by simply placing a text box and adding a banner image. Network creators can also easily place ads in all three columns on the network homepage. With bit more work, posting ads in the header, footer, and content areas, can be done; however, at present this will require a bit of javascript code and may offer some unpredictable outcomes.

Third, Ad cost. In determining how much to sell advertising space for, there are numerous considerations.
  1. What are the demographics of the site?
  2. Who could benefit from advertising?
  3. Do I charge CPC, or CPM?
  4. How much traffic does this network generate?
  5. Where will the ad be placed, (for example above the fold or below)?
This consideration (ad cost) can be expanded even further, but I will leave that for the comments.

Forth, Ad exposure. Ad exposure has four basic variables. They are:
  1. How many times an ad is seen by an individual.
  2. How often an ad is seen by an individual.
  3. The geographical location of the individual seeing the ad.
  4. The time the ad is being seen by an individual.
There are additional variables, like age, gender, browser type, etc., but those are beyond the scope of this discussion and can be explored in the comments.

Managing the complexity of advertising space can be daunting if not properly equipped. for the task.

For this reason, I recommend, Google Ad Manager as a solution for managing your advertising campaigns. This robust solution offers handy tools for managing your campaign along with providing confidence in reporting for your advertisers.

What experiences do you have regarding generating revenue via an advertising model?

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Comments

  • anyone??? I know you can do it.

  • Thank you for this great blog post, even if it's from 2010!

    Question - does anyone know how to offer ads on certain pages of your site?  I know how to offer on the homepage or entire site, but wondering if I can offer on the calendar page only or forum page only.

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