Display advertising has been used online by brands around the world since October 1994 when Joe McCambley launched the first banner ad for AT&T. Since then the market has grown rapidly, and with it the cost of banner advertising.
Today there are hundreds of different advertising networks that you can place banner ads on, from the Google Display Network or BuySellAds.com, to going direct to the website you wish to advertise on and negotiating a deal. Generally these ads will be priced in one of two ways:
- CPM: Cost per thousand impressions ($10CPM = $10 for 1,000 banner views).
- CPC: Cost per click ($1CPC = $1 for 1 banner click).
In my view the CPC payment model has a clear advantage; not only are you only paying for qualified clicks who are interested in your brand and offer but you can also optimise the banners and improve your results more easily. An example of this is using qualifiers in your banners. When you pay per click, putting a qualifer such as the product price in the banner can save you money by stopping the wrong audience from clicking. Putting this same qualifer into the banner when paying per impression however will have no effect on costs thus making it harder to optimise and improve your campaigns.
So how do the top websites in New Zealand charge for banner ads?
Sites that allow you to place advertising directly on them generally display their default rate card and method of charging online. These rates are generally negotiable depending on volume purchased, however allow a great comparison between prices. Looking at the some of the top trafficked sites in New Zealand that allow advertising and the standard banner size (300×250) we can see:
- Trademe.co.nz: $10CPM across the site or $20CPM for specific categories. (source)
- Stuff.co.nz: $15 CPM across the site or $25-$50 CPM for specific categories. (source)
- NZHerald.co.nz: $15 CPM across the site or $20-$60 CPM for specific categories. (source)
- 3News.co.nz: $12 CPM across the site or $20CPM for specific areas. (source)
As you can see most of the top websites that offer banner sales direct (and there are a lot of them) charge on a cost per thousand impressions basis – and they’re not cheap starting at $10CPM and rising up to $60CPM for areas of some sites. When you’re not measuring conversions and are putting out ads purely for branding reasons this may work fine (although you can still spend your advertising money better). When you’re trying to run ROI positive campaigns on banner networks however this method of charging and the high rates make it near impossible.
So what’s the sneaky solution you’ve found?
Well, i’m glad you asked. I have been keeping this strategy to myself for the past few years but after continuing to hear from advertisers who have already committed to expensive campaigns which provide little result i’ve decided to share the strategy. The worst campaign i’ve heard recently was a $30,000 mobile ad spend directly on a news website which garnered 630 clicks ($47/click) and 0 conversions and if I can help businesses like this save a fortune, i’ll be happy.
The opportunity to advertise on top websites for up to 20x less than going direct comes from the excess ad inventory (also known as distressed inventory) that all of these sites have. Essentially these websites will show all their direct ad bookings as the highest priority but if they don’t get enough of these bookings to account for every visitor they get on a daily, weekly and monthly basis they have excess or wasted ad inventory. Their solution? Utilising advertising networks to show ads so they still make some money during this downtime.
By placing their vacant ad spots on these networks each site essentially opens itself up for the highest bid from advertisers, with the ad network themselves deciding which ad to show based on a real time auction. The most commonly used ad network that these publishers use is the Google Display Network which you can get access to via Google Adwords, or if you’re a big advertiser via Doubleclick.
Google Adwords allows you to target each site in their network individually and you bid on a CPC basis (which is better for the advertiser). Let’s take a quick look at the costs to advertise on major websites when going through Adwords instead of direct (this example is from Australia):
As you can see ads are charged on a CPC basis but if we were to work out the effective CPM rate for each website we have news.com.au costing just $0.14CPM, dailytelegraph.com.au costing $0.13CPM, domain.com.au costing $0.23CPM & adelaidenow.com.au costing $0.11CPM etc. These rates are extreme cases as I used very targeted ads which nobody would click unless they were interested meaning a low click through rate and an extremely low cost per thousand impressions. Even if you had a high CTR however with the above stats the resulting CPM would still be very low (and you’d be getting a substantial volume of traffic). I have seen and targeted many of the top websites in both Australia & New Zealand at less then $1CPM through Google Adwords making this a very cost effective way of advertising.
Along with the cost savings, placing ads on targeted sites using the Google Display Network also allows extra features and granular optimisation of the ad campaigns, including:
- Text Ads – The same text ads you see on a Google Search result can also be shown on their Display network. Whilst a targeted site could choose to turn these ads off, I find that many leave them on. Text ads in my experience convert a lot higher than banner ads as they look less like adverts so are a great addition to your campaign.
- Geotargeting – Buying direct impressions off a website means that if international visitors go to the website your ads may show (assuming the site in question doesn’t have the ability to limit by location or doesn’t want to). This means paying for impressions for people who are not in your target market.
- Fraud Protection – Whilst not perfect, Adwords does offer pretty decent fraud protection which filters out fraudulent or robot based clicks on ads and ensures you are not charged for this inventory. If you are advertising on a CPM basis direct to a site you rely on them to remove false ad impressions and not charge for it (which is likely not done very well).
- A/B Testing – one of the best ways to optimise and improve a campaign is to launch multiple versions of ads and then A/B or split test these ads continuously to improve the results you get which is simple to set up and measure results in Adwords.
- Campaign Pausing – Sales team too busy? Want to pause a campaign for any reason? You can do this instantly and within minutes from with Adwords and stop all or some of your display advertising.
- Scheduling – Adwords offers very granular control over when your ads show, this means you can limit exactly what days and times your ads show per site that you target – a very useful feature for B2B advertisers just wanting to show ads during business hours.
All of these changes can be made from the self-service Adwords portal meaning no relying on a sales or marketing representative of the target website to make urgent changes to your campaign. Some websites do offer a lot of these features and more when you go direct however in my experience when you don’t control all these settings yourself they can be painful to manage.
Whilst using this method to advertise on these top websites is a bit sneaky, it can be a great way to test the quality of their traffic in a cost effective way. For advertisers of most sizes there is plenty of volume in these top websites to spend significant amounts however sometimes publishers limit the ads that can be placed on their website using this method. If you’ve exhausted the ads you can put on a site and still have more to spend then you can then take the conversion data and insights into the quality of each sites traffic and confidently contact them direct knowing that although the cost may be higher than using this method you know its the next best opportunity in terms of advertising spend.
So which major sites are available on the Google Display network?
To check whether a site has inventory available you can either look at their website and try and spot locations with Google Ads (represented with a little ‘Ad Choices’ triangle in the corner) or you can type the site into the Google Display Planner and see if it shows up. To save research you could also just start targeting them in your Display Network campaign and if they currently have ads or ever add them in the future you’ll instantly start showing ads on their website.
How do I place my ads on these sites?
To add your ads onto your target websites once you have the list of sites you want to test, you simply need to add each one as a manual placement into a Display campaign. You can either add each placement into it’s own ad group and run targeted ads (ie. with ad copy calling out readers of the website) or you can run them all in the same ad group to take advance of Google’s AI optimisation & bidding.
Each site has different sizes they allow from Adwords, rather than work this out simply add every single banner size you can, text ads and responsive ads and Google will show the ones that are eligible or that become available.
7. Lastly go to the campaign settings and choose what schedule you want the ads to run on and fine tune all settings. I would strongly recommend turning off mobile devices at least initially as a large portion of mobile clicks are accidental.
8. Set your ads live and optimise accordingly, if after a week impressions for a site are low gradually start increasing your bids, keeping a close eye on the overall cost per conversion for the site.
Arguments For Advertising Direct With The Site
Every site that sells advertising direct to agencies and businesses has a dedicated sales team who are 100% committed to selling their overpriced ad inventory so I’m sure if you bring it up with them they will disagree with this strategy. Here are some of the arguments i’ve heard in the past for advertising directly with a website:
- Premium Placements: Some ‘premium’ advertising spots are reserved for their direct advertisers and are in far better positions. For this to be worthwhile at 20x the cost however, you would need a click through rate of 20x the other banner spots. Given most websites designs and their aim to maximise revenue from all advertising sources I think its unlikely you’ll achieve 20x the CTR meaning the premium spot isn’t so premium after all.
- Guaranteed Inventory: Some sites guarantee maximum exposure in all ad spots for a certain campaign. If you have a multi million dollar budget and do want to take over the whole site for a short time and guarantee yourself inventory then it actually may be better to go direct to the website. If however you’re not limited to just a few days for the campaign, need a direct ROI from it and are prepared to not have your ads showing every single refresh then going through Adwords is far better.
- Rich Ads: websites are coming up with very interesting and innovative ad types so if you’re after an ad which the consumer can experience as opposed to one they will just see then it can be better to go direct to an advertiser. That said, Googles Rich Ads are getting better and better and now include video ads which are worth looking at first and testing.
Whilst these arguments may have some merit i’m confident that getting the impressions for up to 20x cheaper, paying on a CPC basis and running the campaigns out of a self service platform all easily outweigh any negatives to this strategy and make it a very valuable way to maximise your advertising budget whilst improving your ROI.
Extra Bonus: Anonymous Sites
If you’re looking for more inventory to display your ads over and above targeting individual sites then it’s worth trialing this bonus strategy prior to buying ad space direct from a website. Essentially, a few major publishers and websites have cottoned on to the significant number of advertisers targeting their site with ads through the Google Display network instead of direct. To combat this, they have negotiated with Google who has allowed them to show as an anonymous placement. Essentially you can’t target them directly, can’t see their results and can’t optimise for each website (all results merge into the one placement). Whilst this sounds bad, each site that is in the “anonymous” placement has been placed their by Google manually meaning they must be a substantial or high profile site and therefore likely have quality traffic over and above what the Display Network generally has.
All you need to do to trial these websites is to add “anonymous.google” as a placement into a new Ad Group as you would if you were targeting “stuff.co.nz”. Its very important to closely monitor the performance of this network so make sure you have conversion goals and make sure you ensure its performing against other placements on an ongoing basis.