3 Digital Advertising Terms You Absolutely Must Know

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Even if you never want to make your blog your full-time job, when the time comes to start seeing a financial return for your efforts, the easiest route towards getting paid is advertising. It's not the be all end all of developing a profitable blog, but it's certainly the most prevalent. Whether you're just considering your options, or already up and running with some form of advertising, there are a few terms every blogger should know.

CPM – Cost per Thousand

First things first, why isn't it CPT? M is the Roman numeral for thousand, and if it seems old fashioned for digital advertising, that's because CPMs are a metric dating all the way back to print advertising. For you, the blogger, it's one of the most common metrics advertisers use when deciding to run ads on a site. When it comes to online ads, the CPM is typically the cost per thousand impressions.

Impressions are related to pageviews, but specific to the individual ad. Let's say you have a banner ad at the top of your page, and another in your sidebar. Someone visiting the page one time would actually count for two impressions if they see both ads.

The sites that tend to make the most on CPM based advertising are sites that get millions of pageviews per month, due to the sheer volume of impressions they generate. Here's an industry secret though: even big sites have trouble making money from all of their impressions. Typically, a site or network will negotiate a certain CPM rate with brands for guaranteed coverage. Traffic spikes, a story getting picked up by a popular blog, and other events can be hard to predict though. So if a blog normally has 100,000 impressions available, those might be sold at top rates. If a post does really well though, and there are 200,000 impressions in a certain month, the blog is left with what's known as remnant inventory, which typically gets sold off at much lower rates.

Even if you aren't a huge blogger pulling in millions of pageviews per month, the great thing about CPM based advertising is that you get paid just for putting the ads in front of your audience

Don't let that stop you from testing CPM advertising out. Even if you aren't a huge blogger pulling in millions of pageviews per month, the great thing about CPM based advertising is that you get paid just for putting the ads in front of your audience. Not anything to retire off of, and sometimes barely enough to cover your monthly hosting costs, but if you're of the “something's better than nothing” mindset, it's something.

Networks can often negotiate higher CPM rates than small-medium sites can on their own. This is because most brands buying CPM ads are looking for a certain number of impressions, and 100 sites combined is an easier buying proposition than 10 individual sites. Glam Media is the largest CPM network with a focus on style publishers, and one of the few to work with bloggers internationally. Federated Media and SAY Media also work with fashion and beauty blogs on CPM campaigns, but tend to focus on publishers with predominantly US audiences. In the UK, Handpicked Media has a CPM offering for bloggers. Nuffnang offers CPM ads for bloggers in Australia and 6 other Asia-Pacific countries.

How much can you make?

For guaranteed placement, CPMs tend to range from $5-10, though some campaigns can go as high as the $40-50 range – rare for a CPM campaign alone. Remant CPMs, which aren't guaranteed, tend to be in the $0.50-1 range, but vary based on a number of factors. One factor to consider is seasonality. While your readers may be just as valuable to you year-round, they're even more valuable to advertisers in the lead up to Christmas, September (back-to-school, fall, and the runway fashion machine all happen then) and certain other holidays.

Native Advertising

Advertorials, sponsored posts, product placement – “native” advertising actually isn't anything new, but there's a newfound interest from publishers and advertisers. For publishers, native ads tend to blend in with content and be less jarring than banner ads – and they can also pay much more. For advertisers, ads that don't look like ads tend to be more effective than banners. People don't ignore them the way they sometimes do with banners, and visitors aren't as annoyed as the pop-up ads that only get clicked because people missed the close button.

For advertisers, ads that don't look like ads tend to be more effective than banners.

The only thing uniform about native ads is that they aren't uniform at all. While most networks do offer advertisers the option of sponsored posts or more content-like ads, native ads are often purchased on a one-on-one basis – a completely different model than CPM banners. Refinery29, who told BoF that they're on track to generate $24 million in revenue this year, says it's “all ad sales.” While their Shops section surely contributes at least something to the total, they've always been clear that the bulk of their (impressive) annual earnings come from the media/advertising side.

Granted, they have millions of visitors (not just impressions) each month, and a small army working on the site. Still, it's worth noting that those tons of advertising impressions often accompany native advertising for brands. In their case, that's usually a specially themed site section sponsored by a brand. During their month of Party Girls, it was a liquor brand – appropriate for the nightlife theme. In the past, it's been a haircare brand for a month-long hair focused series, and various competitions for fashion and beauty brands. Usually, there are accompanying banner ads that run alongside the content, but they're undoubtedly getting higher advertising rates by combining the banners with themed content to support it.

Be sure that any native advertising content is disclosed as sponsored. Also, since there is a closer connection to readers, be sure to only take on topics, brands and products that would make sense as part of regular, unpaid content.

How much can you make?

As your audience grows, native ads can run the gamut from $100 for talking about a brand on social media, to thousands for posts and more extensive content.

You probably won't make $24 million, but this is one type of advertising that can actually be lucrative without a huge audience. When just starting out, the payout may simply be product from a brand to launch a giveaway or competition. As your audience grows, native ads can run the gamut from $100 for talking about a brand on social media, to thousands for posts and more extensive content. The highest paying campaigns often combine native elements with CPM banners, though they're priced together.

 ROI – Return on Investment

Okay, so you may already know this one, but you may wonder what it is and how to calculate it. Guess what? It completely varies for many advertisers. Some brands want to be seen by as many people as possible, so a good ROI for them will be advertising on a high traffic blog, and knowing that their ad or product was seen by millions of people for less than the cost of a print ad or paid search or social media ad. For others, it could be product sales, and how much they had to spend on advertising to get people buying.

While it is reasonable for advertisers to expect a return on investment, as a publisher, you need to find out from them what that return is to make sure you don't get post campaign unreasonable requests

While it is reasonable for advertisers to expect a return on investment, as a publisher, you need to find out from them what that return is to make sure you don't get post campaign unreasonable requests. If you know that you have an audience that rabidly retweets your content, you might be able to deliver an incredible ROI when it comes to social media activity. Do you have a loyal following of shopping readers? Advertisers going for sales might get a great ROI with certain products on your site.

One type of return might not fit all advertisers, but figuring out what return you offer can lead to more profitable campaigns for you and the advertisers you work with.

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14 Responses

  1. Bianca

    Great post! I just created a pricing card the other day and I wasn’t able to find and explanation for CPM in the terms of what it meant to a humble blogger. This is great!

    Reply
    • YM Ousley

      Hi Bianca,
      Glad the explanation could help. If you’re selling advertising yourself (as opposed to a network), don’t be afraid to start in the same price range, or even a bit higher. For small to medium blogs, it can still be affordable for advertisers, and bring in more money than a network.

      Reply
  2. Tsvetelina

    Great post. I’m looking forward to the day I’ll use this information.

    Tsvetelina

    Reply
  3. Alexandra Haygood

    Great article! As a new blogger, this feature was extraordinarily helpful. Would anyone have any insight into how to get native ads and how to put together media kits?

    xo, Alex
    Vast Aspiration

    Reply
  4. Giulia

    As far as CPM ads, do you or anyone else have any recommendations of good networks to join that offer this? I’ve been looking around but other than affiliate networks and pay per click networks, I haven’t had any luck finding a good network to join for say adding a CPM banner ad to my site.

    Reply
  5. Eileen Willows

    Hi there!

    Liking this post, really informative. I was just wondering, would the fact that I have pretty much 50/50 hits from the UK and US due to living a transatlantic life be a point to advertize to advertizers? I’m super new to the game (only started a week ago) but I’m just thinking of how to go about this ad biz when the time comes.

    Thanks!
    Ellie

    Reply
    • YM Ousley

      Hi Eileen,

      Absolutely! Most advertisers want to target audiences specific to a certain market, so the location of your audience is important. The US is a bit more mature of a market in terms of the number of advertisers and how much they spend, but the UK is probably among the top international markets.

      It will probably take time to build up to a point where you can go to advertisers on your own, but while you’re developing your audience, try one of the networks mentioned to get your feet wet.

      Reply
  6. Betty

    Hi guys! I am just starting to search info about Adertising rates for my new online fashion magazine. Where can I get any info about it?

    Reply