But 2008 is going to be all about the ad network, and all I can say to that is that it’s about flipping time. Most emerging networks pay on a CPM basis – CPM stands for Cost Per Thousand impressions (where M stands for the Roman numeral of 1000, for added confusion). This means that publishers are paid a set amount of money for every 1000 times they display an ad on their website. The reason this is an important revenue model is that publishers are paid more consistently than when site visitors need to take an action like in CPA or CPC models. And sometimes, advertisers have either terrible landing pages, insufficient tracking systems, inappropriate ad creative or a clunky shopping cart, all of which are completely out of the publisher’s control and can foil the click, lead or sale.

In the last quarter of 2007, I saw more niche ad networks emerge than in the last two years combined. Ad networks like Casale Media, Tribal Fusion & Advertising.com have been around for a very long time. But they haven’t been a good revenue option for most bloggers for two main reasons :: they either pay very little, or they have high traffic minimums that 90% of bloggers can’t meet. Better options for bloggers started to appear in the last couple of years, like Federated Media & BlogAds, but they were still not available to all publishers regardless of the size of the blog audience.

Most of the ad networks out there now will make you sign some kind of legal agreement, and DO NOT SIGN or AGREE TO ANYTHING without reading it start to finish. There will likely be some tricky things that you need to be aware of if you will be running ads for someone else. Here are some of the things you need to know and look for:

1. Where do the ads need to be placed on my site? Most require that the ads need to be placed above the fold. And if so, your blog template needs to accommodate this requirement.
2. What ad sizes does the network use? Most run the most common sizes, which are 728×90, 300×250, and 160×600. You again need to ensure that your blog template can run these sizes, as not all templates can handle these sizes and still look good.
3. What other ads can I have on my site? Some require the exclusive right to all of your ad space. Some require exclusivity only on the portion of your pages above the fold. Some require that they are the highest ad spot on the page. And still others require that they be the only banner ads, but you can sell text ads. Be very clear about what they require, because the network could drop you if you don’t comply with the agreement on ad placement.
4. Can I still sell my own ads? This is an extension of the previous question, but like I said, some will require that you only work with them or that you cannot join any other ad networks, but can still sell ads directly to advertisers. Be sure you are clear on what you can and can’t sell on your own.
5. What else do I need to place on my site besides the ads to be a part of the network? Many networks will also require that you include some kind of badge or other text that promotes the rest of the network, as is the case with RealGirlsMedia, in our own sidebar. Usually this is included with the ad code, so there is no additional work for you to place it on your site. But you do need to take this into consideration when you make your decision, because it’s going to take up real estate on your page.
6. What is the average price they charge their advertisers? Competitive CPMs range from $10 to $30. From my experience, you can most frequently expect CPMs in the $12-$17 range. Some networks like BlogAds sell ads for a flat rate per week, month, or quarter. Some networks will allow you to set your own prices, which means that you need to know how much to charge to be both fair and competitive.
7. What is the revenue split? Networks will split this CPM with you, 50-50, 60-40, or sometimes 70-30. If you don’t like the CPMs they are charging and don’t like the revenue split, shop around.
8. What are their payment terms? Monthly? Quarterly? How long do they take to pay you? 15 days from the end of the month? 60 days? Can you get paid by PayPal? Or do they cut checks in the mail? Will they pay you no matter what, or is payment contingent upon the advertiser paying them, which means you have to wait for their billing cycle to finish before you will get your money?
9. What happens when they have no ads to run? This is especially important if they require some level of exclusivity, because if they have no ads, and you can’t run anyone else’s ads, you have a problem on your hands.
10. What kind of advertisers do they normally work with? While this may not be in the contract, you do want to ask this question, or look at their existing ads to determine what kind of ads you can expect to run on your site. If they have existing relationships with large, well established brands, this is a good sign.
11. Can I control which ads are shown on my site? Some networks allow you to accept or reject ads that come through their network. Others will simply give you what they have and you have to run them, no matter what. You also might not want flash or expanding ads on your site, so you need to know if you can opt out of these campaigns.
12. What is the term of the contract? 6 months, a year, 3 years?
13. Who will take credit for your ComScore rating? Many networks are requiring that bloggers sign over their traffic so that the network can look larger in their ComScore rating. While this isn’t necessarily a bad thing, if you plan on growing your site to the point that you want to eventually sell all advertising directly to advertisers yourself, then you need to make sure that you can get that ComScore rating back when the contract ends. Otherwise, advertisers won’t be able to find you when you strike out on your own, because media agencies rely on ComScore to find and measure sites to buy advertising from.

New ad networks are appearing every day. And as the industry matures, terms for smaller publishers will get more competitive. Overall, this is great for the industry, as larger sites want to be able to sell more and more ads to their clients, and publishers gain access to higher earnings and better brands that otherwise wouldn’t work with such small sites.

So where do you find an ad network to join?

Remember, some have open enrollment, others are invitation only, and again, some have traffic or page view minimums that you must meet in order to join. Some act more like a rep firm, while others are extremely flexible. Check application instructions carefully to ensure you aren’t wasting your time in applying:

BlogHer

RealGirlsMedia

Federated Media

Adify (Which is a network of 30+ excellent niche networks, including Martha Stewart Living, Forbes.com the Washington Post Blogroll & Mom*Logic)

AdRoll (A more grassroots option that lets sites form their own networks)

Glam Media

BlogAds

Casale Media

24/7 Real Media

Advertising.com

Tribal Fusion

Burst Media

Gorilla Nation

Blue Lithium

Context Web

Quigo

ValueClick

And iMedia connection has a more extensive list of ad networks here

Got any other points to add? Any other hot networks out there to recommend? Or any other questions about ad networks for bloggers and small publishers? Share them in a comment!

Last week I talked about the different internet advertising models for making money from a blog: Affiliate Advertising, CPC Advertising and CPM Advertising. Let’s dive a little deeper into the details of affiliate advertising for bloggers.

Although you can put affiliate ads on your blog from day one, there are a few things that you need in order to make money from affiliate ads:

1. You need an audience (site traffic) that is interested in a specific topic
2. You need to select the right affiliate offer for site visitors
3. You need to present an affiliate ad in a way that compels your visitor to click on it
4. You need a tracking system in place to understand and analyze what converts into a sale with a merchant and what doesn’t

Step 1 :: Building a Targeted Audience

Although this is critical to the success of affiliate advertising, this basic step is important for all money-making strategies (and not just for blogging). You must have a specialized niche and topic for your blog that will draw a unique audience to your site.

This doesn’t mean that you can only write about one thing. Even though this is a home business blog, we’ve even gotten away with writing about Harry Potter, social networking for babies, and Nelson Mandela without ever straying off-topic – as long as you find a way to make a topic relevant to your audience, you can make it work (and never get bored writing!).

For more on building targeted traffic read:

An Introduction to Social Media Strategy and Socially Driven Content

My 8 Hours As A Blogging Socialite

Do You Have a Seasonal Search Engine Optimization Strategy?

Step 2 :: Selecting and Promoting the Right Affiliate Offers

I wish I had a magic one-size-fits-all answer as to how to know what is a great affiliate offer that will convert into a sale. But the only way to figure this out with your blog and your audience is to test, test, test. When I first started out, I thought that mail order home office products & furniture would be a natural fit with the site readers – I never made a penny off of the hours of work I put into building that dang affiliate store.

On the flip side, I also never would have thought that a measly $3 commission would ever add up to much. But I have found that this free local advertising listing offer from MerchantCircle.com has been a consistent revenue performer for all of my blogs for many months in a row, adding up nicely over the long haul.

For more on getting the right affiliate offer in front of the right visitor:

Affiliate Marketing Lessons Learned from Merchant Mistakes

How I Grew My Blogging Profits While My Traffic Numbers Went Down

Step 3 :: Ad Placement and Choosing the Right Ad Creative

While it is fairly easy to slap some banner code into your template, it’s not so easy to have that convert into an affiliate commission for your pocketbook.

Although I do have banner ads on my site, honestly the best way to get an affiliate ad to convert into a sale is within the text of your post. It’s especially important to “pre-sell” your reader on the product or service you are promoting. Reviews, testimonials, or how-to articles have been the best performing ways to promote affiliate offers. An example would be the recommended resources in Top 10 Internet Home Business Ideas You Can Start and Run in Your Underwear.

Generally speaking, text ads perform better than banner ads. But banners can and do work well, depending on your niche (the more tech-savvy your audience, the less likely they will click on a banner ad).

Other ways to promote affiliate ads, in order of best to worst performance:

1. Place a text ad within a post, but separate from the content such as this:
   
2. Place an ad between a post and your comment box. (Actually, I prefer to put Google AdSense ads here because the click-through justifies it).
3. Place an ad in one of these areas recommended by the Google AdSense heat map (the darker orange is the preferred placement spots):
   
   (Thanks to Beau for the reminder that Google has a different recommendation for blogs!)

For more on ad placement and advertising strategy:

Monetize Your Blog Like an A-Lister

Step 4 :: Track and Analyze!!!

The most valuable things I have gotten from blogging for a year and a half have come from the mistakes I have made. As I could see what didn’t work over time, I was able to adjust and change things to find out what did work.

As you build traffic, you can start analyzing the sources and understand what is the best place to promote your revenue-generating content. Social media traffic is fantastic for readership, page views, and SEO, yet is terrible for affiliate marketing.

Most affiliate networks will give you great stats in regards to how well your ads convert (from views –> to clicks –> to sales). Commission Junction gets my top award for the best analytics, which also offer trend graphs so that you can see your clicks, impressions, earnings, etc. over time.

For more on using analytics to optimize your affiliate advertising:

Increase Your Blog Revenue with Analytics :: Part I

Increase Your Blog Revenue with Analytics :: Part II

Recommended Resources

If you really want to learn affiliate marketing, there are two products that I recommend extremely highly – and put out by people who have made lots more money than I have at it. If you put into practice what these people teach, I guarantee you will make your money back and then some:

The Super Affiliate Handbook by Rosalind Gardner

I can’t recommend this book more highly. Rosalind lives her mission to help other affiliate marketers succeed, she’s one marketer you can trust for great advice and her book really delivers what it promises.

Affiliate Classroom

For a more hands-on learning experience, try the Affiliate Classroom. They have a full resource site, tutorials, case studies and an active community of affiliate marketers. And considering you can try it for $1 for the first two weeks, you really have no excuse to not give them a go.

Most of the regular readers of this site know quite a bit about making money from a blog – some of them more than I do. But when I talk to people outside of the blogosphere, the most common question I am asked is, “I don’t understand how you make money at blogging, how do you do it?”.

The short answer is: Advertising.

The long answer is: There are so many kinds of internet advertising and different programs & networks that a person new to blogging or web publishing can get rapidly overwhelmed with the idea of learning more about it.

A Breakdown of Major Internet Advertising Models for Blogs

Most advertising options open to publishers (bloggers) fall into three main categories:

Affiliate Advertising

These are text links and/or banners you add to your site, which pay the publisher if a sale is made on the merchant’s site.

Pro’s:
Even the newest of websites can get accepted into most affiliate programs run by merchants.

If an affiliate ad is targeted well to the site visitor’s interests, affiliate advertising can pay quite well.

Con’s:
It might take you a while to figure out how to target ads well. Until then, you will be basically running someone else’s ads for free.

You can’t control a shopper’s experience on someone else’s site, so you could work hard to send well-targeted visitors to a merchant’s site, only to have the sale fall through due to any number of ecommerce missteps they could make along the way.

Best resources to get affiliate advertising on your blog:

• Commission Junction
• LinkShare.com
• Shareasale.com
• Kolimbo
• Clickbank
• Azoogle
• Amazon Associates

CPC (Cost Per Click) Advertising

These are text links and/or banners you add to your site, which pay the publisher if a site visitor clicks on the ad.

Pro’s
CPC ads provide a bit more consistent income than affiliate ads.

You are paid simply for the fact that you sent a visitor to a merchant, whether or not the merchant makes any money.

Con’s
AdSense is the leading CPC advertiser, and ad-blindness is only getting worse.

Despite promises of AdSense riches, a very high percentage of publishers never make enough money from AdSense to justify a continuation of displaying their ads.

Best resources to get CPC advertising on your blog:

• AdSense
• Chitika

CPM (Cost Per Impression) or CPT (Cost Per Term) Advertising

These are banners you add to your site, which pay the publisher for every time the ad is viewed on a page, or for a set period of time (i.e., per month).

Pro’s
These ads are the most profitable, because the publisher will get paid as long as they continue to display the ads.

These ads provide the most reliable and stable income; nearly all major internet destination sites make their money from CPM advertising.

Con’s
You have to have a fairly established site and following in order to be an attractive option for advertisers. Benchmarks usually start around 500 unique visitors a day or 25K page views a month.

Most merchants won’t even look at a site under 1 million page views a month, which is quite out of the range of most blogs (including this one!).

Best resources to get CPM or CPT advertising on your blog:

• TextLinkAds
• Casale Media
• BurstMedia
• BlogAds
• BlogHerAds

Next week, we’ll start to discuss how to use these different advertising methods effectively on your blog. For now, I’ll leave you with a short list of commonly used internet advertising terms so that you can start understanding the terminology as you do more research.

Internet Advertising Glossary

Above the Fold
A phrase used to describe all of the information visible on a page without scrolling down.

Ad Network
A company that works with multiple advertisers and to match them with smaller publishers. They offer a great deal of value in connecting independent publishers with large companies. Usually they have built automated systems to make it easy for advertisers to screen potential ad placements, and for publishers to leverage a mass audience to connect with large income opportunities.

Ad Rotation
The process of rotating ads in a single spot on a web page. This can be tracked and adjusted to give more impressions to better performing or more important advertisers.

Ad Server
A software program installed on your hosting company’s web server that delivers, regulates, tracks and sometimes automatically optimizes advertisements on your site. They can also be set up so that advertisers can have access to their own statistics and can upload new ads on their own.

Creative
An ad industry slang term for the actual ad that is seen by a site visitor – used as a noun, rather than an adjective. “Can you send me the creative for this ad campaign?”, meaning the actual banner, or the text used in the ad.

CPM
Cost Per Impression – An advertiser pays a certain amount of money per 1000 ad impressions.

CPC
Cost Per Click – An advertiser pays a certain amount of money for every ad click.

CPA
Cost Per Acquisition or Action – An advertiser pays for every sale or lead that was generated from their web site. Also generally known as PPL (Pay Per Lead) and PPS (Pay Per Sale)

CR
Conversion Rate (or Ratio) – The difference between how many times an ad was clicked or viewed vs. how many times that click or view actually turned into a sale, a lead, or a desired action (like a subscription).

CTR
Click-Through Ratio – The difference between how many times an ad was viewed vs. how many times an ad was clicked.

Geotargeting
Serving ads to only a certain geographic area or population segment

Interstitial
This is a somewhat intrusive but highly effect ad format, in which a full page advertisement is loaded in between two pages of content.

PPC
Pay Per Click – Usually refers to search engine advertising, the sponsored links that appear when you do a search. These advertisers pay for each click they get.