Should You Sell Your Own Online Ads? 5 Questions to Answer

Website publishers who want to sell online ads should try to answer five questions before taking such a big step.

Many publishers reach a point where they wonder if they should sell online ads on their own websites.

They often already make money by displaying ads from Google AdSense, Media.net and other vendors on their sites.

They might decide they are not making enough money, want to increase their total revenue and think about how to sell online ads for their websites.

These publishers often have tried other forms of easy advertising such as affiliate marketing and found that it doesn’t pay well.

Whether or not someone should try selling their own ads will depend on the answers to the following questions.

1 – Is the Site Big Enough?

Advertisers are getting hit more than ever with proposals from publishers in all types of media — TV, radio, cable, newspapers, magazines and online operations.

It’s not unlike receiving resumes for a job opening. So the advertisers must decide which proposal has the best return on investment and reaches the most relevant audience.

One of the first considerations is the size of the audience. An advertiser with a $50,000 online budget will not begin to look at a site with an audience of 5,000 unique visitors a month because that site simply doesn’t have enough visitors to consume the entire budget.

Advertisers don’t have time to split a budget among 10 or 20 sites when one or two will provide the returns they need. It is simply more time efficient to do it that way.

A site with at least 100,000 unique visitors a month may start to get their attention.

2 – Does the Site Have a Niche Audience?

A European travel site with 100,000 unique visitors will get more attention than a general travel site with the same audience because the European site is more targeted. Targeted sites usually produce better results.

Advertisers also might consider sites with smaller audiences if the site is deeply targeted.

For example, a travel site about the French wine country will attract more attention with 50,000 uniques than a general European site with 100,000.

3 – Are Enough Advertisers Available?

A niche site about French wine country will have an audience that is likely to click on ads about discounted tours and places to stay.

A niche site about French history will not have an audience that is likely to click on ads. There are far fewer products and services about French history available for sale, so the category has fewer advertisers.

Online advertising categories that consistently do well include travel, health, automotive, real estate, employment and personal finance. All of them are information-intensive categories.

4 – Do You Know How to Price Your Ads?

Publishers who dive into selling their own ads often make the mistake of simply picking a price for advertising without knowing how the market works with rate cards.

Many of them will choose a flat rate number, say $500 a month, and tell a potential client that the $500 will get them the sponsorship of a section on the site.

But if that section gets only 100 visitors a month, the advertiser is paying $5 per visitor — about 10 to 100 times more than they should be paying.

Even though the search engines sell advertising based on cost per click, many sites sell based on cost per thousand impressions.

Some extremely valuable sites with highly targeted audiences may get away with $50 per thousand impressions or even more.

Local sites might be able to charge $10 per thousand, although they get that high because of geographic targeting. Rates in the low to mid single digits are common.

5- Do You Have the Time?

Someone might ask, why wouldn’t I try to get a $4 CPM on my own if I’m getting only $3 from AdSense?

What some publishers don’t know is that Google keeps 32 percent of the ad revenue while the publisher gets the other 68 percent.

Google’s share pays for its ad-serving technology and the time, billing and other resources it takes to manage the advertiser account.

When publishers start selling ads directly, they will find it takes quite a bit of time to create, present and follow up on proposals to potential clients.

In the above example, getting a $4.50 CPM in place of AdSense at $3 will not pay for the time commitment. It starts to make sense only for very large accounts, such as 100,000 impressions or more, at a higher rate.

An AdSense representative once suggested that a better direct sales CPM price is about two times the AdSense rate.

That’s a good guideline. Anything less may lead to a big disappointment.