Found+READ: Comments on stories by Nathan Schorr

David Mullings — Wed, 12 Sep 2007 13:47:50 GMT

It depends on what your long-term goal is. I run my own site and the point is to draw traffic that you can then monetize.

We wanted to present a professional image – your site will ALWAYS be compared to a bigger one and the bigger ones don’t use Google AdWords.

Nothing says ‘start-up’ or ‘strapped for cash’ like AdWords, and it isn’t the quickest to way to ad revenue as some would like to think.

We sell our own banner ads – the companies come to us, AND we have a company that serves other ads for $4.80 cpm minimum guaranteed – but that comes AFTER you get traffic.

Your job right now is to NOT put any ads at all – they aren’t going to make any money right now so why hurt the user experience at this stage?

When your pageviews start approaching 2500 per day you can check out networks or ad auction sites to see what CPM you can get – but check the terms, they often pay Net-30 or Net-60 so you have to factor in that delay in receiving cash.

Once companies start approaching you directly – we use an online form for advertisers to contact us and have had companies like Universal Records contact us through it – then you charge a MINIMUM of DOUBLE what the networks are paying you because that is closer to what they are charging.

Our cpm rate is $15 but we chose a strong niche. I hope the advice from someone running their own site and handling the monetization strategy is helpful.

Nathan Schorr — Mon, 03 Sep 2007 19:46:29 GMT

First of all, thank you to everyone with their words of advice and luck!
There are a few things that I would like to point out, I agree with John. If i were a user from day one and am used to a website being a certain way with a certain format, I would not be pleased at all to logon one day and find the site full of banners. I think the easiest way is to slowly introduce the user to your banners and always remember that those banners must not be intrusive or clustered! I think we all agree on that; banners bother the user but ad’s are a must if you website provides a free service…it is hard to balance both worlds.

John Lutter — Fri, 31 Aug 2007 13:03:54 GMT

I’m not quite sure I agree with the “no banner ad” policy from day one..

You have to set a tone with your site, and if you plan to eventually offer banner and sponsorship opportunities, its better to get your users used to the idea from the get-go, instead of 6 months or a year later.

I’ve been involved in sites where you build the userbase to a certain level, and as soon as you add a banner, your users begin to revolt. From many user perspectives, you are using them to make money.

My view is to not clutter up your site with banners before you’ve gained an audience and content, but also don’t be afraid to set the expectation that your site is a commercial enterprise and is for making money.

Dikshant Dave — Fri, 31 Aug 2007 09:32:52 GMT

I read “Niche” somewhere. if that is so, then you should be thinking of much better ways of leveraging your niche Traffic. Perhaps CPA or some actual revenue conversion should be the target. Besides since it is “Niche”, you are going to lose on the general traffic, so definitely the traffic numbers are going to be much lesser than some figures thrown in this thread.
Besides this all holds good only if you do a good job at what you are suppose to to, ie your website and the content, ;-)

Best of Luck!!

Peter Richards — Fri, 31 Aug 2007 08:39:34 GMT

Forgot to say, good luck!!

Peter Richards — Mon, 03 Sep 2007 19:39:46 GMT

I would say think think about the realities of what you’re about to do.
Say you use Google ads from day 1, $1 CPM is probably optimistic? 50,000 impressions a month would be impressive anytime soon unless you have some awesome PR planned, and that means $50 a month. Worth it? I’d say no.
With banner ads, you’d want to get a better CPM for these, but in reality who’d buy them when you are about to launch with no traffic?
I am in the process of doing the same right now. Take the industry average less a little bit, put it in your business plan and see if it is a viable long term business. Assume zero revenue until your user projections get you to near the point you can achieve the average CPM. Make sure your investment covers you until then.
Investors we have spoken to cared about two things:
1) Our idea, and us (angel investor)
2) Traffic (subsequent VCs).
Focus on making your site awesome, and loved by your members.

Jeff Curie — Mon, 03 Sep 2007 19:38:56 GMT

The advice here is good. But I have to point out that making a business around CPM ads is probably not enough. Do the math – you need A LOT of loyal users to get enough CPM ad sales to be rich. Strong branded sites will target $150 CPM but in reality they don’t get list price, nor do they sell out.

I think you will have a very hard time getting savvy investors to pony up on a CPM-based business unless you can prove amazing traffic levels.

As a marketer, I believe less and less advertisers are spending on CPM banners. It’s OK for branding but for most marketing initiatives it has a soft ROI. CPC, CPA and lead generation have much higher revenue potential. Figure out how one of those models applies to your business.

However, first and foremost, users are the key driver. First you must prove you can win them, second you need a plan to monetize them. See my post on developing a marketing strategy in FoundRead.

Good luck.

Matt Rogers — Thu, 30 Aug 2007 20:09:11 GMT

I note that you are already carrying Goog Ads on your blog, which is a reasonable way to learn about the market.

Banner advertisers spend money either in a blind spot market (where they don’t know where their ads will be served, with a few restrictions) or by placing ads on specific or targetted sites. Until you are big, you will only be able to place untargetted ads from the blind market on your site. These won’t make you rich.

There are a number of companies which can help you here (e.g. DoubleClick).

If you do get big, the key to maximising your CPMs is to target a strong niche which brands are interested in and then know a lot about your users.

It is worth considering alternative revenue sources such as affiliate links to relevant shopfronts, as you are focussed on sports you might want to consider major sports retailers, many of whom will have affiliate links.

Also consider contextual advertising such as this http://www.text-link-ads.com/

It is worth checking our Wikipedia too http://en.wikipedia.org/wiki/Online_advertising.

First step though – get 10s of thousands of active and loyal users.

iguessimjustgonna read — Thu, 30 Aug 2007 19:49:41 GMT

banners from day one, affiliates or people you support, for free to set the tone and standard of what your looking for.

Chris Cholette — Mon, 03 Sep 2007 19:37:44 GMT

You should avoid putting up banners when launching the site. The reaction to ads on sites is very negative a lot of the time, and will cause people not to bookmark or socially promote the site.

Regarding CPM, unless you are a big property or have an extremely lucrative niche you should expect between $1-2 CPM at best.

-Chris