The Advertising Threshold

A client received an inquiry from an ad network – would they be open to offering banner ads on their website from advertisers with products that may or may not be unrelated to the client’s website? It can be rewarding receiving recognition for having grown a website to a size that can attract advertising, but has the website truly reached the Advertising Threshold?

Let’s boil this down: money = good, ugly ads = bad. At some point, the site owner hits a threshold where the good outweighs the bad. There’s a price to pay hitting this threshold – the entire site design, look-and-feel and vibe is compromised by a big banner ad, and that can result in lower time-on-site, lower conversion rate for actual products and services and other consequences. If the content of the banner ads aren’t in any way aligned to the demographics of the site visitors, then the site owner further risks alienating visitors.

I’m ok with banner ads on my site – how much can I make? asks the client.

A typical ad network pays a “publisher” (the site owner) perhaps $1-3 per thousand impressions (let’s call it a $2 CPM, or “cost per thousand”). If the site owner receives 10,000 pageviews a month, they might expect to make about $20 a month, which does not get paid out until generally $100 in revenue is accrued.

There are plenty of other ways to structure advertising, be it CPA (cost per acquisition), CPC (cost per click) or some other form of negotiated deal such as a “Site Takeover.” A website with 10,000 monthly pageviews might be able to make significantly more than $20 a month, but regardless of what that revenue target is, the site owner still needs to decide if the website has reached the Advertising Threshold.

(over the edge image h/t hxc_emo)

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