Ad networks can help online news start-ups take first step toward profitability

Let’s continue with the thought that David raised Monday, and talk about first steps toward making a for-profit news website start-up work.

Today, I’ll be writing about ad-supported news websites, as opposed to subscription-based publications. (We’ve written about those on OJR before, but they are far rarer to find than ad-supported sites.) Since we’re talking start-ups, too, we’ll operate under the assumption that you, the publisher, do not have a dedicated ad sales team working for you, pitching your site to potential advertisers.

Let’s also stipulate that profitability for a start-up demands publishers to minimize the expense side of the ledger. Initial ad revenue for a news start-up – no matter how well designed – likely will be meager, so going it alone (or with a small partnership) and spending little on development and reporting will help keep expenses manageable.

You can earn ad revenue for your website through two ways: Direct sales and ad networks. I would encourage any online news publisher to get over whatever “wall” hang-ups that they have and jump into direct ad sales. From personal experience, direct ad sales yield a far higher CPM than can be had from ad networks, and ad contracts provide income stability from month to month that ad networks cannot promise. (See OJR’s glossary for an explanation of CPM and other terms that might be unfamiliar.)

Ethical issues?

“But what about conflicts of interest?”, I imagine some readers asking. Again, I say, “get over it.” You’re selling space on your website, not editorial coverage. Create specific ad packages and sell those. Having a defined product list makes it easier for transitioning newsroom reporters to wrap their heads around ad sales, without worrying about “selling out” their editorial integrity. After all, “your integrity” is not one of the options on the ad product list, right?

And if you are worried about the appearance of an editor/reporter selling ads in the community s/he covers, well, I think that concerns about such appearances were the luxuries of a field used to 40-percent profit margins and the expensive division of labor those margins paid for. At this point, making money on a start-up news website will elicit far more envy than scorn. (We’ll talk more in future OJR articles about selling ads.)

Starting on an ad network can help a beginning Web publisher get a feel for the advertising market, as well as provide experience in setting up ad space and monitoring ad performance. On an ad network, you will paste an ad-serving tag into a defined space on your website’s template, and the network will select and serve ads into that space, paying you for either the number of ads served or ads clicked (or a combination of the two).

Picking an ad network

I’ve used Google AdSense, Yahoo!’s Publisher Network and Microsoft’s AdCenter and taken a look at or dabbled with BlogAds, BrandsAd Network and Chitika. Of those, I’ve had by far the most success with AdSense, which, I suppose, is understandable given that it is the largest of these networks, handling the most advertisers and revenue. Several top political bloggers are making good money with BlogAds, as well.

Personally, I’d recommend setting up your ads through an ad management service, such as Google’s free AdManager or OpenX. You set up campaigns for each ad network you are using in the ad management server, then use the assigned ad slot code from the management server to place on your pages. Using an ad server allows you the ability to rotate ad slots among several ad networks, to test them against one another. It also allows you to start blending in your direct sales ad placements, once you start selling those.

Google’s AdManager integrates AdSense with a single click, and also allows Google’s advertisers to target your website’s ad slots directly when placing their campaigns, which can help you boost your site’s earning rate.

The ease of setting these ad networks’ and servers’ ad code on a website might lull you into taking a Ron Popeil approach (“set it and forget it!”), but you can’t ignore any aspect of your website and expect it to return success. You need to use the right ad sizes, colors and placement to expect any substantial income from these highly competitive ad networks.

The right size

In my experience, of all the available ad sizes supported by various ad networks, three stand out above all others for high CPM performance:

728×90 Leaderboard

300×250 Rectangle

160×600 Wide Skyscraper

These are IAB standard sizes, used not just for text ads, but for high-yielding Flash and video ads, as well. I strongly recommend that every start-up news publisher looking to support his/her site via ad sales design around at least two of these three ad sizes, which should be placed “above the scroll” on all site pages.

BlogAds uses its own, non-standard ad sizes, so you’ll need to accommodate those if you are planning to use that ad network. BlogAds is unusual among major ad networks in that all of its advertisers are targeting specific websites, instead of bidding on keywords that might reflect any networked sites’ content. That makes BlogAds a tough environment for start-ups; indeed, BlogAds has a more restrictive acceptance policy than other networks. You will need to establish yourself, and an audience, before running with BlogAds.

The right colors

Don’t design your ads in a way that allows readers to quickly visually discount them from the rest of the content of the page. When configuring text ads from the various networks, use the same background, type and link colors as you use on the rest of the content on your site.

Obviously, this advice doesn’t apply to graphic banner ads, where you won’t control color palettes. When you are doing direct ad sales, though, I would urge your advertisers to use background colors that contrast with the other colors on your page and to use strong visual images, such as human faces in natural or white light.

The right pages

I’ve found (and heard from others) the best ad performance on pages reached through search engines by people looking to buy a product or service. That makes ad networks a great fit for pages with evergreen “explainer” articles and other other consumer journalism.

We’ve written before about how to make news pages perform better in search engines. The quick approach is to build evergreen content that many other websites will want to link to as an easy-to-understand, definitive lesson on the topic. Journalists, with their experience and expertise, are ideal individuals to write such articles on their beats. Plus, this provides a great way to ease into online publishing, and to draw immediate reader and search engine attention to a new website.

Think of the keywords that average readers would use to find an article on your subject. Then use those keywords in the headline and opening two paragraphs of your piece. “Feature” heads and leads are death online, killing ad CPM and search engine appeal. Don’t use them on for-profit, ad-supported websites.

Watch, and learn

Finally, monitor your ads’ performance. Watch to see which ad networks, and which pages on your website, perform best, then do not hesitate to make adjustments. You’ll need at least a week or two of data before you can make an informed judgment about various networks. You likely will find that some networks do not perform well for you, or that some networks do better on different sections of your site. Monitor and adjust until you feel like you’ve got the most out of ad networks than you can get.

Then, go write more great content… and start selling your own ads.