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  1. #26
    SitePoint Zealot Venix's Avatar
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    Quote Originally Posted by Dan Morgan
    Question is, are you going to run with a network who take a 25% cut and who consistently generate you an eCPM of $1, or an ad network who take a 50% cut and generate you a consistent $1.25?
    Answer is , I choose none of the above. I choose the network who takes a 25 cut and consistently generates an eCPM of $1,5

  2. #27
    boiler up blackdog's Avatar
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    When you run fastclick, casale, burst or other networks' ads on your site, think of all the companies who's ads get show on your site. There's hundreds of them. Do you really think you have time to give all of those companies sales pitches, negotiate contracts, organize their creatives, send out invoices, collect payments, etc? No way! But lets just for a minute ignore that and pretend you do have the time... Would big companies like Capital One, Expedia and Pepsi really want to deal with a site like yours that can't deliver millions upon millions unique impressions in a month? No way! They'd much rather deal with only the biggest sites on the net and ad networks.

    You see it really is a rare situation when a content publisher can do for himself what an ad network does for its publishers. So in theory, ad networks, as an industry, could lower publisher payouts and there's nothing any of us could do about it.

  3. #28
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    Nice post thody & blackdog - if rep was still enabled you would get some for sure!

  4. #29
    SitePoint Zealot Venix's Avatar
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    Quote Originally Posted by blackdog
    You see it really is a rare situation when a content publisher can do for himself what an ad network does for its publishers. So in theory, ad networks, as an industry, could lower publisher payouts and there's nothing any of us could do about it.

    How about changing to the next network that can run their company with better margins and offer better deals, because that is how things work in reality. And this is exactly what is going to happen. Might take some time though. Hopefully when MSN and Yahoo go after the smaller and mid sized publishers it will be the start of a new era in the ad market.

  5. #30
    SitePoint Zealot Venix's Avatar
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    Quote Originally Posted by thody
    Well, let's take a look at $1 of revenue from ad sales.

    What do you do to generate it?
    - Provide traffic.

    What does an ad agency do to generate it?
    - Secure a client
    - Negotiate pricing
    - Provide support
    - Manage creatives
    - Serve ads
    - Provide stat tracking
    - Collect A/R
    - Risk Management
    - Absorb Postage/EFT Costs
    - Accounting
    - Legal

    The list goes on and on.

    Basically, with all the infrastructure and expense that the ad agency takes on relative to what a web publisher takes on I think the fact that they pay 50% is generous.

    Before I started working with running websites I worked with sales for the webmarket for a media company. And I can tell you with first hand experience that closing a deal , including the faxing and posting you are refering to is a job indeed. But if it is as big a job as all the work involved in running a high quality content site?.... It is not and far from it. Of course it is a big job to sell ads for hundereds of sites, but then again you also take a cut from hundereds of sites too. And 50% is a too big cut in most cases.

  6. #31
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    Quote Originally Posted by Venix
    Before I started working with running websites I worked with sales for the webmarket for a media company. And I can tell you with first hand experience that closing a deal , including the faxing and posting you are refering to is a job indeed. But if it is as big a job as all the work involved in running a high quality content site?.... It is not and far from it. Of course it is a big job to sell ads for hundereds of sites, but then again you also take a cut from hundereds of sites too. And 50% is a too big cut in most cases.
    I agree with you to an extent. I'm certainly not trying to take away from the achievement of starting, and maintaining a successful site.

    However, it's not just a question of "how much work it is", it's a matter of the true cost of doing business.

    Again, not taking anything away from web publishers (I am one myself), but the cost of hosting and promoting a website, plus our time to establish and run a run it is quite pale in comparison to the expense of running a business like AdWords/AdSense. Surely you can't refute that.

    They've got to cover their substantially higher expenses, or they'll go out of business.

  7. #32
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    Quote Originally Posted by Dan Morgan
    Nice post thody & blackdog - if rep was still enabled you would get some for sure!
    Doh! lol thanks anyway.

  8. #33
    SitePoint Zealot Venix's Avatar
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    Quote Originally Posted by thody

    Again, not taking anything away from web publishers (I am one myself), but the cost of hosting and promoting a website, plus our time to establish and run a run it is quite pale in comparison to the expense of running a business like AdWords/AdSense. Surely you can't refute that.

    They've got to cover their substantially higher expenses, or they'll go out of business.

    I see where you are comming from but that dosen't quite paint the true picture. If you add up all the expenses and workhours from the 300 000 thousand or so websites that Adsense is taking a cut from you will see that the work and expenses involved in running Adsense is the one that gets quite pale in comparison

  9. #34
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    Quote Originally Posted by Venix
    I see where you are comming from but that dosen't quite paint the true picture. If you add up all the expenses and workhours from the 300 000 thousand or so websites that Adsense is taking a cut from you will see that the work and expenses involved in running Adsense is the one that gets quite pale in comparison
    lol That's a good point...I used a bad example.

    AdSense is pretty unique in the sense that it was more or less adopted immediately by the publishing community, and grew massively because it has the Google brand associated with it, and because it was innovative technology at the time.

    Also AdWords is essentially automated, taking away from the administrative costs that most Ad networks have in client relation managing.

    Bad example, but I stick by my point for the majority of ad networks.

  10. #35
    SitePoint Zealot Venix's Avatar
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    Quote Originally Posted by thody

    Bad example, but I stick by my point for the majority of ad networks.

    If not totally true for other networks I can agree that there is a difference. But it only means that these networks you are refering to are running on a soon to be outdated business model. Adsense is closer to the future

  11. #36
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    Quote Originally Posted by Venix
    If not totally true for other networks I can agree that there is a difference. But it only means that these networks you are refering to are running on a soon to be outdated business model. Adsense is closer to the future
    Ah "the future", like a fresh spring breeze

  12. #37
    SitePoint Evangelist
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    so adsense is the future, when they dont even tell you the cut, rumored to be around 50%?

    (couldnt resist pointing that out..)

  13. #38
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    Venix, I hope Adsense isn't the future as Google doesn't even tell you what cut they take. In various tests I've done my guess is that Google takes a larger than 50% cut for smaller sites using Adsense. In some cases it's obvious as the minimum Adwords bid is $0.05, and I've often seen Adsense payouts at a $0.02 or $0.01 rate.
    Pat McCarthy
    Director of Business Development -Right Media
    RMX Direct Blog

  14. #39
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    I don't mean to quivel, but I believe the minimum is $.08. However, I've seen $.03 clicks on my sites, so yes, they're definitely below 50% sometimes.

  15. #40
    SitePoint Zealot Venix's Avatar
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    Quote Originally Posted by steb
    so adsense is the future, when they dont even tell you the cut, rumored to be around 50%?

    (couldnt resist pointing that out..)

    Ha ha very funny

    I said ""closer"" to the future. The future like in handeling larg number of publishers with lowest possible costs. The selling of ads being more automated, no need for a big sales teams. Outsourcing parts of the business to Asia, I think we will see more of that. But I have a feeling you knew what I meant
    Last edited by Venix; May 12, 2005 at 15:31.

  16. #41
    Ex-SitePointer silver trophy
    iFroggy's Avatar
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    I like ad networks. I'm working on getting in a few more, including RightMedia. Waiting to hear back.

  17. #42
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    Quote Originally Posted by thody
    Well, let's take a look at $1 of revenue from ad sales.

    What do you do to generate it?
    - Provide traffic.

    What does an ad agency do to generate it?
    - Secure a client
    - Negotiate pricing
    - Provide support
    - Manage creatives
    - Serve ads
    - Provide stat tracking
    - Collect A/R
    - Risk Management
    - Absorb Postage/EFT Costs
    - Accounting
    - Legal

    The list goes on and on.

    Basically, with all the infrastructure and expense that the ad agency takes on relative to what a web publisher takes on I think the fact that they pay 50% is generous.

    Here we go what stands for providing traffic:

    1) Hosting(dedicated? If yes admin's support as well) and in most cases we do all have dedicated servers, that's part of quality high traffic site, isn't it?

    2)Content, the more often you update it the better traffic, otherwise you will lose it(in most cases, not like whatismyip sites)

    3) Can you programm/design ? Good if you can, if you can't hire someone(usually for the big sites)

    These three parameters are quite heavy in terms of resources used. Anyways as more and more ad networks growing up everyday the competition is there, and that's good. The downside of it is that the prices will might drop, but even then we(publishers) should not be aware, because the percentage cut will compensate it.

  18. #43
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    Thumbs up We need to ban together to make them raise rates!

    First - understand that I control network accounts on a top 1500 alexa site

    I am very aggresive with networks regardless of the revenue model(CPM or rev share). I basically manipulate them against each other so that they are pressured to compete for our inventory - we have to turn it into a publishers market ourselves - you have to be blunt with them - drop their impressions levels to next to nothing(make sure you have enough networks to do this) - then debate with them about raising CPM/rev share so you can give them more volume - you have to also go out there and get direct deals(if your sitre is large enough) with clients who use ad networks because they pay better CPM's and then you have more to leverage against ad networks.

    You can also push for better frequency caps - which we all know helps-

    Sometime you can have them give you 2 accounts in one -


    I have been successful in one way or another in raising revenues with advertising.com - addynamix - admarketplace - drive pm - fastclick - mamma - revenue.net - tribal fusion

    That is all the I can give away - hope this helps

  19. #44
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    Quote Originally Posted by N_F_S
    Here we go what stands for providing traffic:

    1) Hosting(dedicated? If yes admin's support as well) and in most cases we do all have dedicated servers, that's part of quality high traffic site, isn't it?

    2)Content, the more often you update it the better traffic, otherwise you will lose it(in most cases, not like whatismyip sites)

    3) Can you programm/design ? Good if you can, if you can't hire someone(usually for the big sites)

    These three parameters are quite heavy in terms of resources used. Anyways as more and more ad networks growing up everyday the competition is there, and that's good. The downside of it is that the prices will might drop, but even then we(publishers) should not be aware, because the percentage cut will compensate it.
    Sure, but hosting ($150/mo for a ded. server), content (arguably a full time job), and programming (lots of commercially available CMSs, etc.) are pretty trivial costs compared to even the cost of a small team of support personnel at an ad firm for example.

    Again, I'm not trying to take away from anyone's accomplishments, I'm a publisher myself, but to suggest that the cost of running a content site, and the cost of running a large ad network is anything close to comprable is a little far fetched...and that's why they take 50%.

    It's much like Matt's article on freelance pricing (http://www.sitepoint.com/article/web-work-should-charge), while the hourly rate may seem high, there's a lot going on in the background that it's accounting for. There's a lot more to running an ad network than just serving ads.

  20. #45
    SitePoint Wizard OnlineGuide's Avatar
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    It really depends on who you use. I think the biggest mystery is Google's cut. Besides MaxOnline, Burst Media, Advertising.com, Tribal Fusion, and a few others; most networks only take 25% - 35%. Anything more is pushing it.
    The Online Guide

  21. #46
    SitePoint Zealot Venix's Avatar
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    Quote Originally Posted by thody
    Again, I'm not trying to take away from anyone's accomplishments, I'm a publisher myself, but to suggest that the cost of running a content site, and the cost of running a large ad network is anything close to comprable is a little far fetched...and that's why they take 50%.
    But again most ad networks also have hundereds if sites which gives them revenue to make up for all the costs. The webmaster only has his one or two sites.

    The cost of running a website can be pretty high. And I am not talking about the cookie cutter sites and amazon affiliate stores that seems to be so popular. In my case It's two full time employees that needs a salery. 600 $ in monthly server costs. Thousands of dollars to pay content providers and writers. Some of the software our programmer needs is very expensive. Running websites full time is a totally different game than having a few hobby sites.

  22. #47
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    You know it wouldnt be that hard (okay it would be hard, but doable) to get a bunch of people together and start a co-op ad network.

  23. #48
    Non-Member nitroy2k's Avatar
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    AH WHAT CAN I SAY!!!
    I make 700$ for me and 1200$ for maxonline
    they take 65% + they take serving fees... that sux but they pay...

  24. #49
    Non-Member nitroy2k's Avatar
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    Oh and one litle not
    Almoust all network have there datacenters... i mean small ones..
    tech that works
    servers
    and they have to buy 100-1gb links... because they have to be avaible 100% time... and that costs preaty much...

  25. #50
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    Quote Originally Posted by Venix
    But again most ad networks also have hundereds if sites which gives them revenue to make up for all the costs. The webmaster only has his one or two sites.

    The cost of running a website can be pretty high. And I am not talking about the cookie cutter sites and amazon affiliate stores that seems to be so popular. In my case It's two full time employees that needs a salery. 600 $ in monthly server costs. Thousands of dollars to pay content providers and writers. Some of the software our programmer needs is very expensive. Running websites full time is a totally different game than having a few hobby sites.

    That's what I'm saying not some hobby sites and CMS stuffed with amazon ads. Ad network is alone , how many websites they do have ? 500, 1000? So it's 1K x multiple job VS one ad network, they can be as much successfull if they would be taking less cut as now. I wish I had the start up capital to build one.


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