Such a simple concept, but such a difficult thing to trust, especially when it comes to impacting your only revenue maker.
Supply and demand, it’s a tricky beast to trust. It took a while for me to realize that basic economic principles also held true in online advertising, despite being knee-deep in a couple of intro. to economics courses at the time. Once I realized it, though, it completely changed my opinion on advertising practices online. Advertising and user-experiences don’t have to butt heads. In fact, by limiting your ad spots you can both maintain revenue, provide a better user experience, and look at yourself in the mirror for the first time in a decade (I call this over-advertising guilt. I had it for years).
The state of media online today isn’t devolving because of ad blockers. It’s devolving because CROs, CFOs and in some cases CEOs are trying to force people to read a site built around financial motivations and not informational motives.
Plastering more advertising opportunities onto a page isn’t a solution. Forcing people to continue living in a world where advertisements online continuously assault their attention isn’t a solution. Legislating against ad blockers isn’t a solution.
In fact, the only real solution is limiting the number of advertisements on a page and committing to the delivery of better reading experiences. Those two things and only those two things will result in a sustainable advertising model on the Internet.
That solution isn’t a paradox, though it may be masquerading as one in your mind right now.
Let me explain.
A little personal story.
At a particular time in my life, I had fallen backward into a modestly successful tech blog. Monetizing my efforts was both an exciting new challenge and a frustrating process. I honestly had no idea what I was doing, but still managed to grow my personal blog from a couple of hundred page views per month to around 500,000 (then later to about 1.3 million).
It was built on the back of gut instinct, naïveté, and a whole lot of “good artists copy, great artists steal” in the design and advertising department.
Having spent most of my time doing hokey advertising research by studying early 2000s blog darlings, the ad strategy I adopted was based on following the leaders in the industry.
With the luxury of hindsight, it’s pretty obvious now that no one was putting much thought into their placements. Ads were plastered everywhere, and it was very easy to make a few dangerous assumptions.
“These guys are killing it; they must have a team testing this stuff and making educated decisions.”
“This top tech blog has at least seven display ads per page. There must be a reason. I should do it too. Oh, look at these other neat monetization strategies. Let’s do all of those too.”
Or, my personal all-time favorite, and something that I still facepalm myself over when I think back on that time in my life:
— “Mashable’s doing it. Maybe I should consider doing it too.”
I invested a lot of time trying to figure out what others were doing to monetize and how advertising online was playing out with new media folks. It’s precisely the kind of thinking that got media into this mess. I was guilty of it too.
That All Changed Though When A Road Hockey Game Caught My Attention.
One day, I was sitting at my desk. It was mid-afternoon. I vividly remember looking at some Google Ad Sense numbers and then staring off over my monitor and out the window.
Some kids were playing ball hockey in the middle of a parking lot across the road (I’m Canadian. It’s always ball hockey season).
I was elbows deep in comparing placement rates for each ad spot individually, one at a time. It felt like a grind, going over those earnings reports one by one. I even managed to print them out. Like, on a real-life printer.
The kids seemed to be multiplying. The ball hockey game was getting a little more intense with each new arrival.
I compared rates from that week to rates from the same week a year previously. All I could think about was going out for dinner, and just quitting for the day.
A kid full-on body checked another in an attempt to get the ball back. Then the victim got up and full on cross-checked his friend in frustration. (Canadian’s are a feisty bunch)
Despite having tremendous growth, my revenue remained constant. And, notwithstanding the addition of several new ad spots to my arsenal, with almost perfect fill rates, the CPM rates were down quite substantially.
The hockey game was in full swing. More kids were showing up. Things started getting crowded. Clearly this was a planned event, and I missed a memo. A few new kids showed up with another net, and two games broke out with half the kids playing in a new group, leaving behind the old one. It was more free flowing and less a free-for-all over the green tennis ball.
Wait. What just happened?
It took a while for me to connect the dots. I can be pretty daft. But, I eventually had that eureka moment where everything started making sense. I couldn’t put my finger on exactly why — at that moment — things made sense intuitively, but removing ads seemed like the right thing to do. I certainly had a strong gut feeling that told me that every time I added another ad spot to my website, the CPM value would crash.
Supply and demand. Huh, go figure.
The Golden Ad Trifecta: Remove Some Ads, Maintain Revenue, Prioritize User Experience.
Of course, removing all of the ads on my website wasn’t an option. I had a hefty hosting bill to pay each month (thanks, WordPress) and tuition to pay. What I then set out to do was find the sweet spot where I could maximize the value of my existing ad spots, maximize the CPM value, and earn the same amount of revenue with the fewest number of ads possible. I was at the point where I couldn’t stand to look at my site anymore, and something had to change.
Introducing more advertisements was never the answer, though it was easy to see the appeal in hindsight. Increasing revenue by managing my supply availability (the ad spots and impressions) and growing demand (audience value) was the answer for me. It may not be the answer for you, but it’s certainly something you should sit back and consider the next time you’re evaluating your site.
How’d I move forward? I killed off one, then two, then three ads.
Next thing I knew, I was earning the same revenue with one ad as I was earning with four. I was able to prioritize content over display advertising, and I was able to re-prioritize readers over advertisers.
Those decisions paid off in spades. People noticed. Advertisers (or at least the Google Ad Bots) noticed. Traffic growth accelerated. Ad revenues stabilized. The user experience dramatically changed for the better.
How Do We Get To Where We Need To Go?
What’s the all mean for media companies and independent publishers? Well, there are a few takeaways that I’d seriously suggest considering.
- Don’t assume others in your content niche have a bulletproof advertising strategy. They probably don’t.
Your competition is probably struggling more than you may realize, especially those sites that are riddled in advertisements. It’s easy to assume they’re just being greedy, but the reality is that most are having a difficult time meeting their financial goals and covering expenses. The lure to add more advertisements is enticing. It was for me.
- Some great companies are looking to build next generation advertising solutions for publishers. They’re designing experiences from the ground-up, and they’re doing everything they can to give publishers control over their ad stacks.
- It’s a long road, and it’s going to take some time, but you should know that a few ad tech companies care about the publishing industry.
- Any company that suggests simply, “adding another spot” to your page isn’t looking out for your best interest. Unless they’re willing to provide a holistic recommendation, the only thing they’re interested in is using you to earn a few dollars.
- The software is improving for publishers. Pretty soon, they’ll no longer have to take the word of middle-men when it comes to advertising solutions. As a publisher or media company, controlling every single piece of your advertising technology stack is important.