Advanced Fandom Economics: It's Okay To Be A Capitalist
http://firefox.org/news/articles/1691/1/Advanced-Fandom-Economics-It039s-Okay-To-Be-A-Capitalist/Page1.html
Leva Cygnet
By Leva Cygnet
Published on 07/28/2008
Someone might start out with a $5 a month hosting plan
and a pretty site, but if bunches of fen descend on it they'll blow
that cheap hosting plan to smithereens in a real hurry and then things
start getting eeeeeexpensive. Firefox News, for example, is hosted by
Servercave. Have a look at the cost of their hosting plans for virtual servers.
We have one virtual server, and not the cheapest offering on that list,
either. And it's real easy to get more expensive in a hurry. Sites have
a tendency to grow on a bell curve, and the cost of hosting goes up directly proportional to the amount of traffic.
One of the webmasters I'm talking to has three dedicated servers with
loadsharing. (Dedicated server = lots more money than a virtual
server.) I'm willing to bet she's got a hosting cost in the high three
or low four figures per month depending on her exact setup, and
depending on if she's purchased or is leasing her servers.
It's pretty easy to end up with server costs in excess of a good-sized house payment per month. And this is why I react with pbbbbb! to anyone who says people should run fan sites out of their own pocket. Sorry, folks. When you start talking dollar amounts in the three and four figures range, I have one of two reactions: "Not happening!" or "Needs advertising!"
I love fandom. $But not that much$.
And on top of that, a really big site takes time to run. I probably spend about six hours a day doing site related work here at Firefox News -- and that includes taking my laptop to my day job so I can work on the site on lunch. I'd speculate that most web masters of large sites put in the same kind of time -- maybe less, and sometimes significantly more. Running a big site is at best a part time job; at worst, it consumes your life.
So to anyone who says that website owners are somehow in the wrong for putting ads on their sites to pay for the servers and maybe make a little profit? Have a raspberry.
And anyone who thinks we're getting rich? Have raspberry pie, with whip cream on top and a side of vanilla ice cream. On the house. It's got lots of raspberries in it. Tasty, isn't it? (See, I said I was going to try to be polite. I'm even offering them pie.)
However, fan sites that are making money off of fandom need to be giving something back to the community. Otherwise, you're just a leech regardless of your server costs and no matter how much time you put in. Laura's site is a good example of profiting off fandom without giving back -- at least, the damage she's doing exceeds the benefit to the community. From what I've seen, Fanhistory is an attempt to link fandom identities (multiple pen names for the same person) and past fannish behavior and actions while ignoring the wishes of the fans in question who might not want this information easily available. This site is upsetting to the fans affected by it. They didn't consent to be profiled on the site, do not want their information shared, and in some cases could be professionally or personally harmed by it.
At best, fan reaction to Laura Hale's site will be for fans to keep sooper sekrit identities more secret for fear someone might blab where Laura might see. This isn't a benefit to anyone; it means fans can't tell anyone their real names or their fanfiction identities. And sometimes, you kinda need to do this. Forget giving someone your real name for a secret santa exchange, think twice about attending a con where you have to put your real name on the registration, be careful who you buy merchandise from if you need to pay with a check, and God forbid you ever tell anyone who knows you as Jane Plainfan that you also write NC-17 slash as Susie Smutfic, even if you know they like to read about boysecks!
Because Laura might find out. And she might tell everyone, including people you wouldn't want to know.
This isn't healthy and it isn't giving back to the community.
My personal opinion is that if you're going to put ads on a fan site and earn a little advertising revenue, you need to be giving back with a site that fans find beneficial, and which they want to use and go to and which they feel good about visiting. The site can provide a service (forums, blogs, chat rooms) or content (a blog or web comic) or whatever else people actually want to go to a site for.
If you are giving back to the community, and spending three or four figures a month on hosting, and spending hours a day running a site that fans love and would be upset if it went away? Then yes, it's okay to put ads on the site -- hell, it's okay to even turn a profit sometimes, if you're really lucky and blessed with the right balance of traffic and ad revenue to hosting costs.
For example, for Firefox News, we provide news, reviews and meta -- written largely by members of fandom, on a site staffed and owned by fans. I've also spent mid-four-figures on site development (i.e., programming) so that writers on the site get a share of the ad revenue with a Google-approved program. It's all about giving back and being part of the community and not being a leech or a scraper. (And, uh, lest anyone get the wrong impression, I'm not getting rich here. I don't ever expect to be able to quit my day job. I'll be happy if the site continues to operate in the black.)
So.
Now that I've laid my position out, the next part of this article is the how-to-fund-your-fan-site-with-advertising article mentioned above. Yes, there's a concern that people might conflate us with Fanhistory because, dude, I'm daring to talk about how fans can increase their ad revenue. And I seriously did consider shelving it and posting it later. However, after second and third thoughts, I'm putting it out there for those who might want to read it. Because I know I'm not one of the bad guys, and I'm not going to let somebody else's bad behavior stop me from giving back to the community.
And the article in question?
Was all about giving back to other fans.
And then I decided I was annoyed enough to write an article about how it really is okay to make money off a fannish web site ...
Money Isn't Evil, It's What You Do to Make it That Matters
So I've spent the last week or so crafting a couple
thousand word article on how to fund a large fan site. There's a need;
I've been corresponding back and forth with a few other fannish
webmasters who are all in the same boat as I am. We've got big sites
(of varying values of "big") and we are all trying to get enough funding keep the lights on
and the hard drives spinning. Fandom
sites are fairly hard to monetize due to a variety of demographic
factors and we have big hosting bills.
I wrote the how-to-fund-your-fan-site article with the
best of intentions. (If I do say so myself) I'm pretty good at figuring
out ways to keep Firefox News's bills paid with ads. What I've learned here
should translate to other fannish sites easily. The pay isn't great --
I effectively work on the site for less than minimum wage -- but it's
a fan site, I love it, and I'm not exactly trying to get rich.
However, when I sent a beta copy of the article with tips and tricks for increasing ad revenue to Melissa, my Igor assistant, she basically said, "You can't do that right now."
(I know Igors aren't supposed to talk back, but I'm a
progressive evil overlord and I encourage this among my minions.
Sometimes they're smarter than I am. Smart minions with minds of their
own beat groveling yes-ma'am minions any day of the week if you're
trying to take over the world have a well-run web site. Besides, groveling gets annoying after awhile.)
She suggested to me I shouldn't post it because of
Laura Hale. Because of Fanhistory. Because ads, and making money on
advertising, is in a bad stink in fandom right now. And my initial
reaction was, "Oh. Yeah. You're right."
So I filed the article away to post at a later date.
And then I thought about it a bit.
And then I decided I was annoyed enough to write an
article about how it really is okay to make money off a fannish web
site. (With the usual caveat that none of us except Xing are getting rich at this.)
First off, let's establish what's not okay. And this
doesn't have anything to do with money, or advertising, or being a
business targeted at fans. This pertains directly to the whole Laura Hale mess.
In the process of running a fan site, it is not okay to
stalk people. Digging up personal information on people who want
nothing to do with you, posting their personal contact information on
your site, and then refusing to take it down borders on stalking. It's
also not okay to be rude to people who are basically okay, nice people
who haven't done anything to hurt you -- and have a lot to lose by you
posting their identity on your site. Fanhistory is, at best, rude in the way they have compiled information on fen.
And if you violate the basic and generally accepted behavioral standards of a community that you're trying to make money off of, (1) you suck and (2) you'd better expect a vicious backlash from the community.
If you have no idea what I'm talking about, see the link above for the ugly details. Ithiliana does a good job of covering most of the pertinent details of the story.
And if you violate the basic and generally accepted behavioral standards of a community that you're trying to make money off of, (1) you suck and (2) you'd better expect a vicious backlash from the community.
If you have no idea what I'm talking about, see the link above for the ugly details. Ithiliana does a good job of covering most of the pertinent details of the story.
However.
There's a certain element of fandom that is screaming,
"YOU CAN'T MAKE MONEY OFF OF FANDOM! Evil! Boo! Hiss! Die, foul
capitalists, die!"
And I respectfully and politely disagree. Well, mostly
politely. Somehow, I can never get the snark completely out of my
virtual voice, but I can see where the anti-capitalism fans are coming
from. I mean, it's fandom. We're all in this for the squee and the love
and the obsessive-compulsive desire to memorize every single line from
our favorite TV shows. (I can do entire passages of dialog from Disney's Gargoyles. What about you?)
The anti-capitalism fans would claim that anyone trying to make money off of fandom isn't really a fan. They must be an outsider, or a turncoat.
To which I say: Pbbbbb.
Okay, okay, I'm trying to be polite. Really I am.
To which I say: Let me explain my position here.
Running a small site is something anyone can do. It's
easy enough to get free hosting, or pay a few bucks (and by "a few" I
mean $5 or so a month) for slightly better than free hosting. With a
couple clicks of a mouse in Cpanel, you can install phpBB, or
Wordpress, or Joomla on your $5 a month site. Then put a few pretty pictures on it, and some
content, and call it a site. Voila. Easy. Simple. I could put up a
small fandom site on any topic in under an hour.
But fandom needs the big sites too. By nature, we like
to congregate together. By inclination, we are a pretty social lot --
what fun is being a fan without lots of other fans around you? Squeeing
alone is just not the same as squeeing to an audience of other fans who squee right back. Without big sites to support large groups
of fans, we'd be scattered to the four winds across the 'net -- one fan
here, two fen there, all alone in our lonesomeness. The big sites let
us hang out together in large mobs.
However, the more of us congregate together in one spot, the more expensive the hosting gets and the owner of the site has to pay for it somehow.
However, the more of us congregate together in one spot, the more expensive the hosting gets and the owner of the site has to pay for it somehow.
It's pretty easy to end up with server costs in excess of a good-sized house payment per month. And this is why I react with pbbbbb! to anyone who says people should run fan sites out of their own pocket. Sorry, folks. When you start talking dollar amounts in the three and four figures range, I have one of two reactions: "Not happening!" or "Needs advertising!"
I love fandom. $But not that much$.
And on top of that, a really big site takes time to run. I probably spend about six hours a day doing site related work here at Firefox News -- and that includes taking my laptop to my day job so I can work on the site on lunch. I'd speculate that most web masters of large sites put in the same kind of time -- maybe less, and sometimes significantly more. Running a big site is at best a part time job; at worst, it consumes your life.
So to anyone who says that website owners are somehow in the wrong for putting ads on their sites to pay for the servers and maybe make a little profit? Have a raspberry.
And anyone who thinks we're getting rich? Have raspberry pie, with whip cream on top and a side of vanilla ice cream. On the house. It's got lots of raspberries in it. Tasty, isn't it? (See, I said I was going to try to be polite. I'm even offering them pie.)
However, fan sites that are making money off of fandom need to be giving something back to the community. Otherwise, you're just a leech regardless of your server costs and no matter how much time you put in. Laura's site is a good example of profiting off fandom without giving back -- at least, the damage she's doing exceeds the benefit to the community. From what I've seen, Fanhistory is an attempt to link fandom identities (multiple pen names for the same person) and past fannish behavior and actions while ignoring the wishes of the fans in question who might not want this information easily available. This site is upsetting to the fans affected by it. They didn't consent to be profiled on the site, do not want their information shared, and in some cases could be professionally or personally harmed by it.
At best, fan reaction to Laura Hale's site will be for fans to keep sooper sekrit identities more secret for fear someone might blab where Laura might see. This isn't a benefit to anyone; it means fans can't tell anyone their real names or their fanfiction identities. And sometimes, you kinda need to do this. Forget giving someone your real name for a secret santa exchange, think twice about attending a con where you have to put your real name on the registration, be careful who you buy merchandise from if you need to pay with a check, and God forbid you ever tell anyone who knows you as Jane Plainfan that you also write NC-17 slash as Susie Smutfic, even if you know they like to read about boysecks!
Because Laura might find out. And she might tell everyone, including people you wouldn't want to know.
This isn't healthy and it isn't giving back to the community.
My personal opinion is that if you're going to put ads on a fan site and earn a little advertising revenue, you need to be giving back with a site that fans find beneficial, and which they want to use and go to and which they feel good about visiting. The site can provide a service (forums, blogs, chat rooms) or content (a blog or web comic) or whatever else people actually want to go to a site for.
If you are giving back to the community, and spending three or four figures a month on hosting, and spending hours a day running a site that fans love and would be upset if it went away? Then yes, it's okay to put ads on the site -- hell, it's okay to even turn a profit sometimes, if you're really lucky and blessed with the right balance of traffic and ad revenue to hosting costs.
For example, for Firefox News, we provide news, reviews and meta -- written largely by members of fandom, on a site staffed and owned by fans. I've also spent mid-four-figures on site development (i.e., programming) so that writers on the site get a share of the ad revenue with a Google-approved program. It's all about giving back and being part of the community and not being a leech or a scraper. (And, uh, lest anyone get the wrong impression, I'm not getting rich here. I don't ever expect to be able to quit my day job. I'll be happy if the site continues to operate in the black.)
So.
Now that I've laid my position out, the next part of this article is the how-to-fund-your-fan-site-with-advertising article mentioned above. Yes, there's a concern that people might conflate us with Fanhistory because, dude, I'm daring to talk about how fans can increase their ad revenue. And I seriously did consider shelving it and posting it later. However, after second and third thoughts, I'm putting it out there for those who might want to read it. Because I know I'm not one of the bad guys, and I'm not going to let somebody else's bad behavior stop me from giving back to the community.
And the article in question?
Was all about giving back to other fans.
Susie Fangirl Has a Problem: Everbody Loves Her Web Site
Susie Fangirl has a problem.
See, a couple of years ago, Susie Fangirl decided she wanted to create the Bestest Fan Site Ever for Jane Author. The Bestest Fan Site Ever started out as purely a hobby for Susie -- she adores Jane Author's books and decided she'd make a shrine to Jane Author, and a place for other Jane Author fans to hang out.
And so she made a really cool site. It has forums, and fanfiction archives, and art galleries. There's IRC chat rooms and podcasts and a mailing list. Susie's got a blog, and Susie's even got interviews with Jane Author (who loves the free publicity and thinks Susie's just the bee's knees). In short, the Bestest Fan Site Ever is an incredible labor of love.
Unfortunately, Susie's got a problem, because the other fans love it too. They love it too much. They love it soooooo much that Susie's gone from a $5 a month hosting plan to multiple servers with load sharing. The cost is slightly more than her house payment every month and she's ready to throw her hands up and walk away. She never expected it to cost this much money!
Of course, she applied for an Adsense account a couple of years ago, but Adsense is only bringing in half what her servers cost. And she's got three ads, a strip of text links, and three referral buttons on every page of Adsense just like Adsense allows and yet earnings are simply dismal. She hears people make money at advertising all the time -- did you hear the one about the guy who made a million bucks in three months at Adsense with a dating site? -- but her site sure isn't doing that.
Well, I'm no expert, but I've made a study of this for the last few years and I'm here to offer my advice about funding a moderate sized fandom-oriented site with advertising. Take it with a grain of salt and feel free to disagree or discuss in the comments.
First off, a quick explanation of the terms and concepts, for those of you who are completely new to this.
There are three types of ads you need to worry about: CPM, PPC, and affiliate.
CPM ads pay per impression.
PPC ads pay per click. A user clicks the ad, the site gets paid pennies to low dollars. Usually pennies.
Affiliate ads pay per action. They're also sometimes referred to as PPA (Pay Per Action) ads. An action would be someone buying something, downloading software, or filling out a form. Some are legit, some are not.
The amount you make per thousand impressions is referred to as the "eCPM" rate.
CTR is the click-thru-rate. It's the percentage of your traffic that clicks on an ad.
CPC is cost per click. It's how much you make on average per click and is applicable to affiliate and PPC ads.
TOS is the terms of service of the advertiser; you want to pay careful attention to this because the rules vary from advertiser to advertiser. If you break the rules, even accidentally, the advertiser may ban you for life from their program. Read the TOS thoroughly, ask the advertiser to clarify anything you don't understand, and consider at least lurking on sites like digitalpoint.com or webmasterworld.com so that you can see discussion of the salient points of the TOS. Seriously. I see people banned all the time for accidental-but-stupid stuff.
Okay. Got that? Easy enough.
So, Susie Fangirl has a fan site plastered with Adsense ads and nothing else. And she's starving for ad revenue -- even with the Adsense she's operating a couple hundred a month in the negative. Her significant other is complaining, her wallet's hurting, and she's very afraid that she's going to have to throw in the towel and walk away. And whenever she charts the growth rate of the site and sees it's likely she'll need another server within the next few months she wants to cry.
Remember when I said that Susie's stuffed every single page with as many Google Adsense ads as possible?
Adsense, for those completely new to advertising, pays a mix of PPC and CPM. They also do something called "smart pricing" where they determine the relative "value" of a site for advertisers and pay accordingly. While Adsense doesn't release their formula, many web developers have observed -- and I would concur from my own experience -- that site plastered with a lot of Adsense ads per page earns less per click. This may be because the CTR per ad is lower.
Susie needs to prune the Adsense advertising. And since she's going to put other forms of advertising on the site, this should be relatively painless. I personally recommend one or two Adsense ad blocks per page. (I used to say pimp Firefox or Google Pack referral buttons too, but those are going away in August 2008 when Adsense retires the format.)
Additionally, Susie's probably making a classic mistake of using 160X600 towers and/or 728X90 banners for her ads. These may be better reserved for CPM ads as the CTR isn't great for either format. For Adsense, on a fan site, I'm really fond of the 300X250 rectangles. Adsense shows a lot of video ads and occasionally movie trailers in this size. Fans are attracted to Teh Shiny and actually like movie trailer ads. (Fans have been known to pay to see a really bad movie just to see a really good trailer. You betcha they'll watch a movie trailer ad.) One 300X250 ad floating in a block of text is great, or otherwise planted somewhere prominent on the page. Since many Adsense ads pay per click, you want your big rectangular ad block to sit somewhere that users will see it.
(However, be wary of making your efforts make the position of the ad too obvious. Google's TOS forbids you from drawing too much attention to the ads, among other things. Read Google's TOS thoroughly and make sure you understand it.)
At the end of the text (blog, fic, whatever), assuming this is a text page, Susie might also consider putting a 468X60 half-banner ad. This is because when someone's done reading something they may well be wondering what to do next. And hey! There's a nice shiny ad offering collectible widgets for sale and off the fan goes to buy some collectible widgets. Voila. Ad click.
Depending on the type of site, you may also wish to consider in-line text ads. I wouldn't recommend them on fiction, but they work well for forums, blogs and news. In-line text ads are the ads that underline a word in an article or forum post and show a pop-up ad when a user hovers over the word. The pay is low, but you can set 'em and forget 'em and they're unobtrusive enough that you'll forget they're there.
Kontera has a low bar to entry for inline text ads. Other companies have higher pay per click.
Now, CPM ads. Which for many fan sites could be their bread and butter. However, many webmasters, like Susie FanGirl, make the mistake of ignoring them. Fan sites do not have the highest CTR because fans tend to be savvy, intelligent, technology-wise people. We recognize ads and we consciously ignore them, unless they're very specifically targeted to us. The plethora of "ringtone" and "Free IQ test" (yeah, right) ads that appear in Adsense just don't appeal. Plus fans are generally a lot more interested in the fan site itself than some merchant's site at the end of the ad. So PPC ads that rely on user clicks do not generally make that much money on a fan site.
However, CPM ads do not pay for clicks, they pay per impression. And CPM advertisers are often more interested in raising brand awareness than making an actual sale. They'd like you to click, but they're happy if you just see and remember their shiny ads. Ask yourself this: What's a Zwinky? Bet the word "Zwinky" summons up a big-eyed cute little girl, even if you've never been to the Zwinky site and Zwinkies give you hives every time you see them. That's because the Zwinky site advertises using lots and lots and lots of CPM ads and they've achieved widespread brand recognition.
A quick note on an easy way to raise revenue if you have a large-ish site -- CPM ad brokers will generally display their most valuable inventory first, with the highest eCPM. After three or four pages, they'll start showing the cheap stuff. (Zwinkies. Sigh.) If you will still have enough pageviews to satisfy the advertiser's requirements, and you have a bit of technological know-how, you can replace the CPM ads with an Adsense block or a different company's ads after four or five pageviews by a user. This takes a bit of scripting but it is a legitimate way to increase your ad revenue. (As per usual, I will stress that you should verify that your the specific company's TOS allows this.)
There are other companies out there, but two reliable CPM ad brokers that I've used for this site are Adbrite and Tribalfusion. I won't comment on the others as I've had no personal experience with them.
Adbrite has a lower bar for entry, but they also, by my observation, have lower quality ads. I've learned to scrutinize the landing site for an ad thoroughly before approving it, as many of the sites are a bit ... questionable. On the other hand, you can approve each and every ad for Adbrite so you can hand-pick the advertisers. The pay can be as high as $2-3 eCPM. If it's much higher than that, check everything over carefully -- I've seen higher legitimate offers from Adbrite, particularly for insterstitials (ads that appear between pages on your site a la the full page ads on fanfiction.net) but some of the advertisers have issues with their moral integrity.
(I had an offer for $300 eCPM once from Adbrite. Let's just say the landing site was very shady and I did not approve the offer. Also, I'm still wondering if they didn't mean to put a decimal point in that number.)
If you have sufficient traffic, Tribalfusion requires 2,000 pageviews a day but they are an excellent, reputable company. They've delivered a consistently reliable stream of "good" ads (i.e., not scams) to this site and I've yet to have to ban even one, though I did proactively ban certain categories. If I could only have one advertiser, it would be Tribalfusion, simply because they're trouble free and pay well.
The third type of ad are pay-per-action ads, or affiliate ads. An awful lot of fan sites display an Amazon link and suggest to fans that they buy stuff from Amazon to support the site. However, Amazon is far from the only company to offer commissions on sales. I don't like Amazon. I've had very lousy luck making money from them and, in fact, haven't even made $10 in two years. And I've tried hard a few times. It really sucks to put several hours of work into plastering the site with Amazon ads and them make $2 in the next month.
However, you can make money with affiliate sales. Some options to explore:
There are other affiliate sales options; signing up and perusing the companies on Linkshare and Commission Junction can be most enlightening.
Of course, there are other ways to fund sites -- direct donations work for Wikipedia, for example. However, I've always figured I'd ratherignore
look at ads on a site than be guilted in to donating. Yep, I've done it
a few times for favorite sites, particularly ones that were in a niche
that would be very hard to monetize with ads. I've also walked away
from a less-than-favorite but occasionally useful forum after the owner
begged for donations and I suggested, "Why not put some ads on this
site?" and the owner reacted like I'd suggested she sacrifice babies to
Voldemort. She thought it was okay to beg repeatedly and somewhat
obnoxiously for donations but wouldn't even consider ads because, "I don't like advertising. It's tacky."
Personally, I think it's tackier to ask users to pay for a site when you could make it free for everyone with the proper use of tasteful advertising. But opinions do differ. Advertising's one option among several and one where I see many fan sites could benefit from some easy improvements.
See, a couple of years ago, Susie Fangirl decided she wanted to create the Bestest Fan Site Ever for Jane Author. The Bestest Fan Site Ever started out as purely a hobby for Susie -- she adores Jane Author's books and decided she'd make a shrine to Jane Author, and a place for other Jane Author fans to hang out.
And so she made a really cool site. It has forums, and fanfiction archives, and art galleries. There's IRC chat rooms and podcasts and a mailing list. Susie's got a blog, and Susie's even got interviews with Jane Author (who loves the free publicity and thinks Susie's just the bee's knees). In short, the Bestest Fan Site Ever is an incredible labor of love.
Unfortunately, Susie's got a problem, because the other fans love it too. They love it too much. They love it soooooo much that Susie's gone from a $5 a month hosting plan to multiple servers with load sharing. The cost is slightly more than her house payment every month and she's ready to throw her hands up and walk away. She never expected it to cost this much money!
Of course, she applied for an Adsense account a couple of years ago, but Adsense is only bringing in half what her servers cost. And she's got three ads, a strip of text links, and three referral buttons on every page of Adsense just like Adsense allows and yet earnings are simply dismal. She hears people make money at advertising all the time -- did you hear the one about the guy who made a million bucks in three months at Adsense with a dating site? -- but her site sure isn't doing that.
Well, I'm no expert, but I've made a study of this for the last few years and I'm here to offer my advice about funding a moderate sized fandom-oriented site with advertising. Take it with a grain of salt and feel free to disagree or discuss in the comments.
First off, a quick explanation of the terms and concepts, for those of you who are completely new to this.
There are three types of ads you need to worry about: CPM, PPC, and affiliate.
CPM ads pay per impression.
PPC ads pay per click. A user clicks the ad, the site gets paid pennies to low dollars. Usually pennies.
Affiliate ads pay per action. They're also sometimes referred to as PPA (Pay Per Action) ads. An action would be someone buying something, downloading software, or filling out a form. Some are legit, some are not.
The amount you make per thousand impressions is referred to as the "eCPM" rate.
CTR is the click-thru-rate. It's the percentage of your traffic that clicks on an ad.
CPC is cost per click. It's how much you make on average per click and is applicable to affiliate and PPC ads.
TOS is the terms of service of the advertiser; you want to pay careful attention to this because the rules vary from advertiser to advertiser. If you break the rules, even accidentally, the advertiser may ban you for life from their program. Read the TOS thoroughly, ask the advertiser to clarify anything you don't understand, and consider at least lurking on sites like digitalpoint.com or webmasterworld.com so that you can see discussion of the salient points of the TOS. Seriously. I see people banned all the time for accidental-but-stupid stuff.
Okay. Got that? Easy enough.
So, Susie Fangirl has a fan site plastered with Adsense ads and nothing else. And she's starving for ad revenue -- even with the Adsense she's operating a couple hundred a month in the negative. Her significant other is complaining, her wallet's hurting, and she's very afraid that she's going to have to throw in the towel and walk away. And whenever she charts the growth rate of the site and sees it's likely she'll need another server within the next few months she wants to cry.
Remember when I said that Susie's stuffed every single page with as many Google Adsense ads as possible?
Adsense, for those completely new to advertising, pays a mix of PPC and CPM. They also do something called "smart pricing" where they determine the relative "value" of a site for advertisers and pay accordingly. While Adsense doesn't release their formula, many web developers have observed -- and I would concur from my own experience -- that site plastered with a lot of Adsense ads per page earns less per click. This may be because the CTR per ad is lower.
Susie needs to prune the Adsense advertising. And since she's going to put other forms of advertising on the site, this should be relatively painless. I personally recommend one or two Adsense ad blocks per page. (I used to say pimp Firefox or Google Pack referral buttons too, but those are going away in August 2008 when Adsense retires the format.)
Additionally, Susie's probably making a classic mistake of using 160X600 towers and/or 728X90 banners for her ads. These may be better reserved for CPM ads as the CTR isn't great for either format. For Adsense, on a fan site, I'm really fond of the 300X250 rectangles. Adsense shows a lot of video ads and occasionally movie trailers in this size. Fans are attracted to Teh Shiny and actually like movie trailer ads. (Fans have been known to pay to see a really bad movie just to see a really good trailer. You betcha they'll watch a movie trailer ad.) One 300X250 ad floating in a block of text is great, or otherwise planted somewhere prominent on the page. Since many Adsense ads pay per click, you want your big rectangular ad block to sit somewhere that users will see it.
(However, be wary of making your efforts make the position of the ad too obvious. Google's TOS forbids you from drawing too much attention to the ads, among other things. Read Google's TOS thoroughly and make sure you understand it.)
At the end of the text (blog, fic, whatever), assuming this is a text page, Susie might also consider putting a 468X60 half-banner ad. This is because when someone's done reading something they may well be wondering what to do next. And hey! There's a nice shiny ad offering collectible widgets for sale and off the fan goes to buy some collectible widgets. Voila. Ad click.
Depending on the type of site, you may also wish to consider in-line text ads. I wouldn't recommend them on fiction, but they work well for forums, blogs and news. In-line text ads are the ads that underline a word in an article or forum post and show a pop-up ad when a user hovers over the word. The pay is low, but you can set 'em and forget 'em and they're unobtrusive enough that you'll forget they're there.
Kontera has a low bar to entry for inline text ads. Other companies have higher pay per click.
Now, CPM ads. Which for many fan sites could be their bread and butter. However, many webmasters, like Susie FanGirl, make the mistake of ignoring them. Fan sites do not have the highest CTR because fans tend to be savvy, intelligent, technology-wise people. We recognize ads and we consciously ignore them, unless they're very specifically targeted to us. The plethora of "ringtone" and "Free IQ test" (yeah, right) ads that appear in Adsense just don't appeal. Plus fans are generally a lot more interested in the fan site itself than some merchant's site at the end of the ad. So PPC ads that rely on user clicks do not generally make that much money on a fan site.
However, CPM ads do not pay for clicks, they pay per impression. And CPM advertisers are often more interested in raising brand awareness than making an actual sale. They'd like you to click, but they're happy if you just see and remember their shiny ads. Ask yourself this: What's a Zwinky? Bet the word "Zwinky" summons up a big-eyed cute little girl, even if you've never been to the Zwinky site and Zwinkies give you hives every time you see them. That's because the Zwinky site advertises using lots and lots and lots of CPM ads and they've achieved widespread brand recognition.
A quick note on an easy way to raise revenue if you have a large-ish site -- CPM ad brokers will generally display their most valuable inventory first, with the highest eCPM. After three or four pages, they'll start showing the cheap stuff. (Zwinkies. Sigh.) If you will still have enough pageviews to satisfy the advertiser's requirements, and you have a bit of technological know-how, you can replace the CPM ads with an Adsense block or a different company's ads after four or five pageviews by a user. This takes a bit of scripting but it is a legitimate way to increase your ad revenue. (As per usual, I will stress that you should verify that your the specific company's TOS allows this.)
There are other companies out there, but two reliable CPM ad brokers that I've used for this site are Adbrite and Tribalfusion. I won't comment on the others as I've had no personal experience with them.
Adbrite has a lower bar for entry, but they also, by my observation, have lower quality ads. I've learned to scrutinize the landing site for an ad thoroughly before approving it, as many of the sites are a bit ... questionable. On the other hand, you can approve each and every ad for Adbrite so you can hand-pick the advertisers. The pay can be as high as $2-3 eCPM. If it's much higher than that, check everything over carefully -- I've seen higher legitimate offers from Adbrite, particularly for insterstitials (ads that appear between pages on your site a la the full page ads on fanfiction.net) but some of the advertisers have issues with their moral integrity.
(I had an offer for $300 eCPM once from Adbrite. Let's just say the landing site was very shady and I did not approve the offer. Also, I'm still wondering if they didn't mean to put a decimal point in that number.)
If you have sufficient traffic, Tribalfusion requires 2,000 pageviews a day but they are an excellent, reputable company. They've delivered a consistently reliable stream of "good" ads (i.e., not scams) to this site and I've yet to have to ban even one, though I did proactively ban certain categories. If I could only have one advertiser, it would be Tribalfusion, simply because they're trouble free and pay well.
The third type of ad are pay-per-action ads, or affiliate ads. An awful lot of fan sites display an Amazon link and suggest to fans that they buy stuff from Amazon to support the site. However, Amazon is far from the only company to offer commissions on sales. I don't like Amazon. I've had very lousy luck making money from them and, in fact, haven't even made $10 in two years. And I've tried hard a few times. It really sucks to put several hours of work into plastering the site with Amazon ads and them make $2 in the next month.
However, you can make money with affiliate sales. Some options to explore:
- Poster sales through Allposters or Art.com, which have a very high commission. This may work well for a media fan site.
- iTunes downloads through Linkshare. I have good luck with these. iTunes offers music, video, and audio books and the 5% commission for downloads does add up. Many TV shows are available on iTunes.
- For
sites with a high percentage of US users, Netflix is an option (again
through Linkshare) which pays $9 to $18 per signup -- they basically
have every TV show, anime, and movie legally available in the United
States.
There are other affiliate sales options; signing up and perusing the companies on Linkshare and Commission Junction can be most enlightening.
Of course, there are other ways to fund sites -- direct donations work for Wikipedia, for example. However, I've always figured I'd rather
Personally, I think it's tackier to ask users to pay for a site when you could make it free for everyone with the proper use of tasteful advertising. But opinions do differ. Advertising's one option among several and one where I see many fan sites could benefit from some easy improvements.