CPM advertising tends to get a bad rap.
The truth is that most CPM advertising earns its poor reputation. Many CPM networks pay a paltry $1-2 for a thousand page views, a rate that only begins to cover server costs for any decently sized website.
The real money will never be made with blanket networks. The real money in CPM is in direct advertising sales – sales that skip the network to find the best possible advertiser for your site.
Requirements for Direct Ad Sales
There are a few things you must have to make direct ad sales make sense:
1. Large audience – Most sites will not be on a CPM advertiser’s radar until the site generates at least 25,000 page views per month. The simple reality is that advertisers cannot economically justify a small CPM deal. That’s why networks have become so popular – a network is a single point of contact for millions of impressions on thousands of sites. If you want a direct deal, you have to be large enough to be on the radar of a CPM buyer.
2. Common audience – Your site must have a common audience. Niche sites, such as those that discuss a single topic – RC cars, fashion, alcohol, whatever – are the best. The smaller the niche, the better. However, larger sites with broad audiences can do very well with CPM advertising, so long as the audience is wealthier than average. You wouldn’t think to advertise clothing to people interested in finance, for example, but people who read WSJ.com are wealthier than average. Wealth is a very valuable common denominator, failing that you have no other “niche” that is more valuable due to targeting.
3. Engagement – You must have good engagement metrics from web traffic. The higher the number of page views per visitor, the better. A higher average time on site score, which you can find with most analytics tools, is also better. CPM advertisers want to expose their brand name to as many people as possible for as long as possible. If your site has a very high bounce rate, chances are that visitors’ eyes will spend a very small time surveying the advertisements on your site. Brand exposure is key – and engagement in the form of time on site and high page views per user is necessity.
How to Sell CPM Advertising
Direct advertising sales require that you work to sell your inventory. You cannot sit back and expect for CPM advertising deals to roll in every time you open your mailbox. If you cannot invest the time, simply use a CPM network or CPC network to sell inventory.
If you’re willing to invest the time to reach a deal, then you will be rewarded with higher earnings on a page view basis. The reality is that CPC and CPM networks take anywhere from 20-50% off the top for themselves, meaning that the middleman is robbing you of valuable income in exchange for convenience.
What defines your audience?
Take the time to think about the common traits in your audience. I used to have a very large network of MySpace layouts sites. Is that audience particularly valuable? No – not one bit. Teenagers are a tough sell, and CPM networks were giving me less than $1 per 1000 pageviews for large skyscraper advertisements on my sites. The only upside was that traffic came easy – millions of teenagers modifying their MySpace pages would naturally seek out cool new stuff to throw on their profiles.
Large advertising networks missed the value of my traffic. They displayed the typical garbage advertising that you would expect on an entertainment website. You know what I’m talking about – the 1,000,000th visitor gimmicks, the “free” ringtone offers, or the “take this quiz to see which Harry Potter character you are!” advertisements that were always in-demand from advertisers willing to pay pennies per thousand page views.
But I found a better common denominator. Acne. The teenagers biggest fear, and a “problem” my broad audience would pay to get rid of. My sites had nothing to do with acne, even if most of my visitors were in a common fight to remove it.
A few mailed letters and emails later, a single hygiene company bought every bit of inventory I had at a rate four times what CPM networks would pay me for the same traffic.
When you make the switch to CPM advertising, you have to create exclusivity. You have to make it appear as though you have only a very limited amount of advertising space, even though you’d love to deck your site out in ads to reap more marginal cash with each page view.
Start first with a 468×60 banner, 160×600 skyscraper, and/or any size leaderboard that you would like. This is the inventory you should seek to sell first. Do not, and I repeat, do not start out with a collection of 125×125 blocks. First, no one outside the webmaster niche wants to pay for 125×125 positions in your sidebar.
Secondly, if you add four spots for 125×125 banners, you just increased your available inventory from the three traditional sized banner ads to seven open positions including the 125×125 slots.
Now that you have only three advertising positions, it’s time to start hunting for the advertisers.
Finding CPM Buyers James Bond-style
Some sneaky tricks will give you an edge in finding CPM advertisers for your website. Here is a step-by-step list of actions I take to sell new CPM advertising:
1. Do some prospecting – The best way to find CPM buyers is to view other sites in your niche. Go to the large portals and look for ads that have the look of a direct ad – no AdSense or DoubleClick “triangle” over the ad content. Take note of which sites you see over and over again. If you see one common advertiser, chances are good that this common advertiser has a goal to keep their share of voice as high as it can be in a particular market. Share of voice is a measure of how often their advertisements show relative to all advertising inventories in your market.
2. Hit LinkedIN – Once you have done the basic prospecting to see who the common advertisers are in a particular niche, start hunting for media buyers on LinkedIN. Use the “site:linkedIN.com” Google query to your advantage. I like to search for “site:LinkedIn.com “companyname” media buyer” to find an individual working as a buyer for the company.
3. Seek juniors – You want to find “junior” media reps. These are the people that talk to new sites about advertising. Senior media reps are the people who run the numbers and sign off on contracts. Reaching out to a senior media rep is a bad idea! While they might be the decision-maker, they don’t get paid for responding to you. Don’t try to jump the chain of command – it will only leave a bad taste in their mouth when your media offer needs their signature. Talk to juniors – they’re far more willing to discuss advertising opportunities, as that is their definitive job description.
4. Reverse the email code – We do not want to talk about advertising via LinkedIN. LinkedIN is not a place for business; it’s personal. You wouldn’t discuss ad deals on the buyer’s Facebook, and LinkedIN is the same way. You want their email address. The best way to get an email address is to reverse the code. Generally, companies use a combination of first names and last names to create individual email addresses. Bob Smith might have the email address of [email protected]. I like to send in a basic customer service request to the business to get a feel for their email system. Typically, someone will respond with a signature that has their direct email. From there, I can dissect the email to determine what the media buyer’s email is by replacing the customer support representative’s first and last name with the appropriate details of the located media buyer. Magic!
5. Carpet bomb only after hunting – Do not carpet bomb your advertising offers until you have exhausted all opportunities to locate a media buyer’s direct email. If you cannot find a media buyer’s address for the company in question, or you did not get a response to your first email to the buyer, then you can carpet bomb. Never send your offers to the generic “support” address. Use the “marketing” address if listed. Otherwise, pick the best possible match, and send an email requesting that they pass your information on to the marketing department. This does not work all that well, which is why I suggest you use the email discovery and LinkedIN route first.
How to Craft your Pitch
Get ready to lie. No, we’re not going to lie about things that matter (pageviews, time on site, whatever), but we’re going to lie to any juniors we talk to about working on a campaign with them.
Here’s a great starter:
I previously talked to you/another media representative about working on an advertising campaign on (insert clickable link here.)
Your company would be a great fit for our audience interested in TOPIC. I noticed that COMPANY NAME is ACTION VERB, NEW DEVELOPMENT and I’m certain YOUR SITE’S audience would be very interested in what you have to offer.
Can we discuss a new advertising campaign?
Always make sure to make the email feel like it is not something you copy-pasted to as many people as possible. Mentioning their company name is a great way to do this. Also, be sure to search for the company’s recent press releases to find a new product or development that you should be aware of. This indicates your familiarity of the brand, and your attention to their advertising needs.
The Waiting Game
Expect a response rate of 3-10% for your solicitations. Responses will trickle in, likely over the course of the next 2-3 weeks. You should plan to contact as many people you can in the shortest period of time that you can.
Remember, you planned to keep your advertising as exclusive as possible. If you reach out to 200 companies, and hear back from 10, you have only 3 advertising slots. This is key. This is how bidding wars begin.
Start with high CPM rates and work your way down. I like to take my Adsense revenues for a particular banner slot and double it. No interested party ends discussion when you shoot too high. A junior’s job is to negotiate rates down. In the worst case, they will to agree to pay your stated rate for a 468×60 banner, but request an additional 125×125 as “added value” for free, for example. Explain your justification for higher rates (user engagement, the value of your brand, or a combination of factors that make your visitors more valuable than visitors on other sites in your niche.)
Keep the email addresses of all the people who show interest. You have 10 interested parties, and only three slots. When these three slots come up for expiration after working your original deal, you can send out a reminder email to the seven reps who you couldn’t previously strike a deal with.
See if you can get a higher offer from one of these seven, before telling one of your original three advertisers that you need a higher rate because competitor X is really interested in the advertising slot.
CPM Advertising Takes Commitment
In your first round of deals, you might only earn 10-20% more in advertising revenues than you would have with Adsense or other CPC networks. However, after establishing a relationship with several companies, and creating more demand than you have supply, you have all the power in the world to push for higher and higher rates as each renewal comes up.
I will not lie to you – the first round can take 10-20 hours to find potential advertisers, email individualized pitches, and close on negotiations. However, each subsequent renewal will take mere minutes, and the potential for increased CPM rates with each contract renewal is almost certainty. Additionally, you will find that in due time your relationships with certain brands become more valuable.
Having a connection on a deal for a single site is transferrable. In my MySpace site example above, I was able to start buying out all my competitors and make money on the first day of ownership by leveraging existing contacts to sell my newly acquired inventory. If it weren’t for the MySpace bubble going to bust in the months that followed, I might have a much more exciting story to tell about the riches I made. 😛
Even still, the point remains – building up your own network of direct advertisers is just one of the many ways to give your site a monetization edge over the competition. It’s also a very good way to add value to online pursuits like site flipping. Every year hundreds of sites in your niche will be sold, many of which are under monetized. Developing a network of very valuable advertising clients today is a very good way to build your online business into the future.