By Cheryl Woodard, Posted April 2006 [PRINT VERSION]

According to Internet Advertising Bureau, 98% of all online advertising revenue in 2006 will go to 50 websites with the highest traffic volumes. Think AOL, CNN, and ESPN. But much smaller websites are also sharing in the nearly $6 billion advertisers spent in the first half of 2005. Here’s how:

Search Ads: Search ads account for 40% of advertising sales on the Internet. Google AdSense is the leading provider in this category, but Yahoo and MSN are planning comparable services. After being accepted by Google, you paste a block of HTML to the pages of your website where you want ads to run. Google charges advertisers a cost-per-click fee for matching their ads to keywords appearing on your site and handles all the cash dealings with advertisers. You will get about a 50% share of the revenue generated at your site. There are no minimum traffic levels for AdSense, and even sites with only a few dozen visitors per day can generate $100 per month in AdSense revenue. Google also offers the option of putting a search box on your site and selling ads on the results page. And recently, Google added a service for selling cost-per-click ads into your RSS feeds. Learn more at www.google.com/adsense.

Display Ads (Banners and Buttons): 20% of online ad spending goes to banners, buttons and other forms of display advertising. There are several networks that, like Google, will handle the whole process for you in exchange for a share of the revenues. Display ads are sold on a cost per thousand impressions basis or CPM, with prices ranging from a low of $4 to about $40 for highly targeted sites. DoubleClick and other very large networks focus exclusively on sites that reach at least 2 million page views or impressions per month, but other networks handle ‘specialty’ sites that see only 5,000 impressions per month or less. Generally, the networks pay 60% to 75% of revenues to publishers. Here are some networks worth exploring:

Classifieds: About 18% of online ad revenue in 2005 went to publishers of classified ads. Classifieds are sold by the amount of time they appear on your site, days, weeks, months, etc. Some of the same networks that handle display ads (listed above) will also handle classifieds for a share of the revenues. And you can also install software to handle this function on your own. Here are some software vendors to consider: USANetCreations.com, E-Classifieds.net, and GeoClassifieds from GeoDesicSolutions.com.

Commissions: Growing to 6% of all online ad spending in 2005, pay-per-performance ads give you a share of the revenue generated when someone buys a product through an ad on your site. Sometimes called ‘affiliate’ programs, you can set up these ads yourself – through your favorite online retailers – or you can join a network that handles the affiliation agreements for you. CommissionJunction.com is one example. Performics.com is another. Typically, commission range from 5% to 10% of sales.

Sponsorships: Capturing 5% of online ad spending last year, sponsorships are usually negotiated directly between you and your key advertisers. Many times, the sponsor is also advertising in your print magazine or newsletters and pays an annual or monthly fee to sponsor selected content at your site.

Email Ads: Accounting for 2% of online ad revenues in 2005, email ads are typically limited to a 55-character headline, 50 words of text, and a linked URL, although some newsletters can also accept banner-sized GIF files or even animated GIF files. Email ads are sold either per thousand recipients (CPM) or per clicks (CPC).

Even websites with relatively small traffic numbers can find a way to capture some ad dollars by exploring these new options.

More Information

I recommend my book for first-time publishers. It will help you understand the key questions like: how much should you charge for your ads? What kind of advertisers should you approach? What kind of information must you provide to them? Those key decisions have enormous impact on your sales success. My second book, Every Nonprofit's Guide to Publishing (co-authored with Lucia Hwang) covers web publishing in even greater detail. Look for both in your local library, well-stocked bookstores, or buy them right now from Amazon.com.

Questions?

My consulting group helps publishers launch, run and grow newsletters and magazines. If you have questions about selling ads, or if you're having trouble selling enough of them, e-mail us. Tell us about your situation and we'll give you a proposal showing exactly how we can help you.