6 ways to increase blog profits with direct advertising sales

Igloo was born out of a desire to help my sister, a keen blogger, to manage her ads. In looking at the various tools available, I became frustrated at the lack of automation and the maintenance required by the user. Surely there had to be a better way?

So, in consultation with a few helpful individuals, I applied my background as a developer and built a tool, Igloo, that would make it easier to manage ads. Specifically, it was designed to help my sister (and other blog owners) maximise profits and minimise time spent.

Dosh Dosh recommends increasing ad revenue on your blog by selling advertising directly to your customers, rather than using an ad-network. He says “I’m a very big advocate of direct advertising because of the freedom it gives and the potential for higher earnings.” This is true, however it can also be an expensive trade-off. That is, while it will likely increase your revenue, it will also increase your costs (especially time spent). Grace from design*sponge estimates that self-managing direct ad sales can take up to 2 hours a day.

If you are currently (or want to be) selling advertising directly, I can show you 6 areas where you can change the way you work to increase your profits immediately. My online tool can help you with most of this, but I can show you how you can do these things manually or with other tools.

1. Set up

   Before you talk to a single advertiser, you need to decide upfront what ads you want to show; how much to charge for them, and how you are going to show them. This is because, depending on the tool you choose, you may be limited in the way those ads can be displayed or in the way they are charged for.

   First, choose what sorts of ads to show: text ads and/or graphic ads. Text ads are generally cheaper (as they don’t make as much of an impression), and don’t intrude on your design or the user experience as much as graphic ads, and they often take up less space. However, graphic ads are generally preferred by advertisers as they tend to get more click-throughs.

   Next, choose how you are going to charge for your ads:

   • Pay Per Day/Month: this is the simplest to set up, and doesn’t need much more support than a spreadsheet. Advertisers may be interested in having their ad start on a certain day, and finish a set period later, so if you are doing this manually, you need to make sure you check your spreadsheet daily for ads that are starting or finishing. Alternatively, WordPress plugin Ad-minister can schedule your ads for you.
   • Pay Per Impression (CPM): advertisers may still be interested in their ad starting on a certain day, but they are buying a set number of impressions. Using a spreadsheet to manage this may be difficult, since ads aren’t going to finish easily at the end of each day. WordPress plugin Adserve can help here.
   • Pay Per Click: you could work out a deal with your advertiser to charge them for the number of clicks their ad gets. But there’s a downside – it is too easy to game and will potentially involve you in disputes with the advertiser.

   With both of these decisions, an alternative is to offer the advertiser all of these options. However, I personally think that you should have a limited set of options, rather than offering everything. You can definitely change your line-up if it isn’t popular, but start with a couple of options and expand rather than starting with everything.

   Uncertainty is a killer – make sure you stipulate where on your page/site the ad will appear. Insert a “Your ad here” graphic if you don’t have any ads yet.

2. Marketing

Before you start, it’s important to have a media kit or advertising info page with details of your readership, visitor stats, prices, ad sizes etc. Now you are ready to start talking with your advertisers. But how do you keep track of them? The simplest way is via a spreadsheet (try Google Docs), with all contact details and success rates. Many network sites (like Project Wonderful) will store advertiser contact details for you – and Igloo does this too – allowing you to keep a database of everyone who has ever placed an ad with you.

When you are contacting your past, current and prospective advertisers it can sometimes help to have a hook. A “limited time discount” (or coupon) is sometimes handy to get people in the door, or to cushion against a price rise for past and current advertisers. If you aren’t getting enough bites, you can also try publicizing a coupon on your website / Twitter feed/ RSS feed/ newsletter – anything to get the word out. If you are doing this manually, tell the advertisers to “mention this ad to get the discount”.

3. Placing the ad

Here you have two options: either take the ads over email and place them manually (using one of the tools mentioned in “Set up”), or give the users a self-service interface, where they can upload their graphic themselves. Openx has plugins that allow users to create their own ads. Allowing an advertiser to create their own ad gives them control by letting them understand the process, and massively reduces the amount of time that you would otherwise spend modifying the ad for your ad spot, or replying to the advertiser to tell them “that ad is the wrong size”.

4. Getting paid

Invoicing and payments can be a fairly simple process. There are plenty of ways to receive money (Paypal is probably the simplest), you just need to make sure that the advertiser is kept up to date through the process. Send them a clear invoice (Paypal can do that, or you could do it yourself); notify them when you have received their payment; and tell them when their ad will start. The quicker you can do each of these steps, the better your service will seem, and the more likely you are to have a returning customer.

5. Upselling

When an advertiser has decided to purchase, try offering an incentive to spend more. Discounts and bonuses both make the marginal cost of purchasing another day of advertising more attractive.

Discounts reward with decreased payment for buying more, whereas bonuses reward with increased product for buying more. I prefer the idea of a bonus, because it doesn’t leave any money on the table; instead it gives the advertiser more for their money. Discounts are probably easier to administer manually, and can be in the form of percentage discount, or “daily rate: $1, monthly rate: $25, 6 months: $125″ etc. Make sure you make the discounts or bonuses clear in your rate card.

Try encouraging your advertisers to spend more by sending a reminder when their ad is finishing, asking them to extend instead of letting it lapse. It’s also a good idea to inform the advertiser how the ad has performed (through Click-Through Rate and impressions), when asking them to extend. This is a simple contact at the point of need for the advertiser; it reminds them of your existence, and it is dead simple for them to then act upon your request.

6. Communicate with advertisers

Good relationships are key, so be as open as possible in your communication with your advertisers. At each step of the process make sure that they are informed. If you are using Gmail, there is a nifty labs plugin called “Canned responses” that allows you to send a form email. This can save you a lot of time. Other people store their responses offline (in spreadsheets or text files) and copy and paste into an email. Wherever there may be a little uncertainty from the advertiser, tell them what is going on: “I received your ad: here is your invoice”;”I received your payment: your ad will start in about 1 hour”, “Your ad is finishing: would you like to extend?”, “Your ad has finished: here are your stats”.

These are all simple things to do, but can potentially be time-consuming jobs if you don’t have tool support. Choose a tool and get started. If you agree with my advice and would like to implement it, check out my tool Igloo, where all of this advice is implemented for you.

Write your top tip in comments to win

Igloo is offering one lucky reader of How To Make My Blog a 2 month regular subscription (valued at $190). To win, write your top helpful tip for how to increase profits from direct advertising sales in the comments. Competition closes on December 19th.

A guest post by Jonathan Ricketson, founder of Igloo: direct-sales-advertising management service (a tool to help bloggers manage ads online). If you want to guest post on HowToMakeMyBlog, please check out more info here.

Image by Alan Cleaver.