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:

• 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 ignore 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.