Tag Archives: the-deck

The problem with advertising

May 8th, 2012

The problem with advertising is that the customers will always be the advertisers and they will always want value for their ad spend and value typically comes from compromising the viewer’s experience.

Countless well-meaning, tasteful, and respectable people have taken a swing at making friendly advertising that is both respectful of the viewer and valuable to the advertiser. The problem is that it very rarely works out in the long run because well-meaning, tasteful, and respectable people really do not like “the business” advertising. And viewer-friendly advertising is often of very little to no value to the advertiser.

The business of advertising is a numbers game. When well-meaning, tasteful, and respectable people start out trying to change the world of advertising they typically look at those numbers as they should – they look at them as people. People that don’t want to be swindled or bothered or nagged. People that are at the current web page they are viewing because they really like the blog post they are reading, the newspaper column they are reading, or the video they are watching. People that actually do not like advertising.

So the well-meaning, tasteful, and respectable people say to themselves “I’m one of those people. I don’t like ads. But people that write blogs for free and want to do it full-time need to make money somehow so let’s make a great ad network that sells unobtrusive advertising that people will love.”

Noble. But this business plan isn’t based in reality. This plan can only work if the ad network’s brand is as strong as the brand of the sites in its network. And even then it is questionable whether or not the network can sustain advertiser value longterm. The Deck seems to have success in this area because simply being an advertiser on The Deck comes with some credence. But in my experience this is the exception.

Once the initial novelty of the idea for a viewer-friendly ad network wears off everything comes down to the pageviews and the click-throughs. If the click-throughs are high the pageviews can be lower. If the pageviews are high – and they usually have to be very, very high – the click-throughs can sometimes be not as important since advertisers will typically hope to make up for them with brand recognition of some kind.

And then there is the repeat advertiser problem. If an ad network can bring in brand new advertisers every few months then they needn’t worry about having repeat advertisers. So they needn’t deliver on value. “Your campaign wasn’t all that great but thanks for trying.” And then they simply move onto the next company with $5,000 to spend. The problem is eventually the black books of the individuals running the network will run out of companies to call. Then they have to deliver. Every single month.

Viewer-friendly advertising can work in smaller numbers and with direct relationships with advertisers. However, once an entire “network” of brands are involved it slowly will move away from the relationship between website and brand and move towards the numbers.

Ad dollars will always move towards the latest and greatest thing. The thing the kids love. So newer ad networks with novel ideas on how to do advertising will all typically start off pretty well. Any company with a decent advertising budget will take a crack at whatever the latest fad is. Make no mistake, the same people that will buy your 120×120 pixel well-designed, well-meaning, tasteful, and respectable ad will buy a pop-under ad. They don’t really care about your high-brow morals in the world of advertising. They will go to where the value is. And when your network doesn’t produce value for them in a certain amount of time they’ll stop buying your inventory. Simple.

Patrick Dryburgh nails it in his post about leaving FusionAds:

I hold nothing against the guys running Fusion now. They’re in a tough business, and need to produce page views and sell those page views and then produce and sell some more. So, I get why they need to take money from companies or sign on publishers I don’t think represent the initial vision.

Fusion Ads has to compromise because in the world of advertising there is money in compromising. The more you’re willing to let go of the viewer as the customer and the more you’re willing to give up their experience the more money you’ll make.

Several times in my life where I’ve made the bulk of my income on advertising. Each time I always thought there was a new and better way to do it. A way that didn’t feel so icky. A way to make the viewer and advertiser the customer. It simply isn’t possible. If you’re thinking about starting an ad network of some kind I’d strongly suggest you reconsider.

The Daring Fireball Recipe

September 19th, 2011

When a recipe works it is generally riffed on by countless cooks. Each riff becoming its own unique dish and, chances are, riffed on once again.

John Gruber’s Daring Fireball is a recipe that is working and the cooks are busy in the kitchen adding a pinch of this, a pinch of that and seeing what works for them.

So far none of these recipes have become better, in this blogger’s opinion, than its master recipe but several have certainly managed to create their own dish that works well enough to feed their own mouths.

What is the Daring Fireball recipe? It consists of the following:

  • 1 multiple-times-per-day updated link log.
  • 1 not-so-frequently updated blog with longer, well-written posts.
  • 1 (or two) audio podcasts (to taste).
  • 1 weekly RSS feed sponsorship.
  • 1 well-curated image-based ad on each page view.

From outward appearances this recipe nets Daring Fireball a very decent sum – which is why the cooks are in the kitchen. With no inside information here is what one can surmise based on what is public knowledge.

The three main ways Daring Fireball generates revenue is through its weekly RSS feed sponsorship, The Deck Ad Network, and sponsorship of 5by5 Network’s The Talk Show. Daring Fireball also uses affiliate links and sells Tshirts from time-to-time but I do not believe these to be major contributors to its profit. They may both contribute to its ability to generate revenue but I believe the bulk of its profit come from the three channels I’m covering here. Without knowing more about how The Deck Ad Network and The 5by5 Network distribute revenue it is impossible to know exactly how much revenue goes to Daring Fireball but we can do exactly what the other cooks are doing; make assumptions and get close.

Daring Fireball currently charges $6,500 USD per week to sponsor the RSS feed. This recently increased from $6,000 within the last few weeks, and increased to that not too long ago from $5,000 USD and so on. So to figure out the yearly revenue generated through this single sponsorship program would depend on where you start and end the year. But, lets jump out on a limb and say that a weekly sponsorship has cost at least $5,000 for the last year. That’d be about $260,000 USD per year from the RSS feed sponsorship. At $6,500, should it maintain or go up higher from here, it’d be $338,000 USD for the next year.

The Deck, of which Daring Fireball is only 1-of-52 members, has a current cost of $8,300 USD per month. Or, sponsors can pay to buy a day, called a “roadblock”, for $8,300 per day. With 27 sponsors in the month of September that is about $224,000 USD generated. (Assuming The Deck had sold absolutely no “roadblock” ads. If they had it’d be significantly more.) I’m assuming that The Deck distributes revenues based on a traffic-based model of sorts (more page views == more moolah) but I don’t know exactly. But even if you were to split this revenue evenly among all parties that’d be nearly $8,300 per month for Daring Fireball. Based on nothing other than my gut Daring Fireball’s 4M+ page views per month make up a fair amount of The Deck’s overall traffic and so, one could assume, that Daring Fireball gets a slightly larger share than my math suggests.

5by5 is currently charging $3,000 USD a month for its Livestream sponsorship (which The Talk Show does each week) and $3,000 for its bandwidth sponsorship as well as individual show sponsorships which they don’t publicize the price for. It is very difficult to tell how 5by5 would distribute this revenue but, again, I’ll make some assumptions. I assume that a bandwidth sponsorship is all for 5by5. Bandwidth is a bill that goes to 5by5 and not the hosts. Bandwidth for a show as popular as The Talk Show could easily be a few thousand dollars per month (not to mention editing costs, etc.) So if we take the bandwidth sponsorship off the table I can only assume that The Talk Show generates about $9,000 USD per month. $3,000 for the Livestream sponsorship, and $6,000 for the two episode-based sponsorships that are within the show. Plus donations, Tshirts? I think I’m underestimating the revenue-generating power of The Talk Show but I can’t be sure.

Not counting the revenue Daring Fireball generates with its affiliate links and tshirt sales; it is my assumption that Daring Fireball could generate upwards of $550,000 USD per year (going forward). And I believe I’m underestimating because my assumptions are probably low. Again, the affiliate links and tshirt sales are probably fairly good revenue generators but the bulk of Daring Fireball’s profit likely does not come from these two channels.

Why go through all of this to figure out how much revenue Daring Fireball generates? Because it is exactly what wannabe-pro-bloggers are doing every single day. They do this math based on the information they can gather and decide to take a stab at it themselves. And with Daring Fireball’s RSS feed sponsorship increasing every few months why wouldn’t they? And good for them. The more the merrier. I just have one request.

I hope that those that decide to use Daring Fireball’s recipe decide to do whatever they can to make it all their own. Don’t just add a little more salt and pepper – change the main course from fish to beef. Make every ingredient from your own garden and don’t use the same brand ingredients Daring Fireball does. Make something unique that will inspire others to do the same. Be a good cook not a copy cat.

Tharrrr be ads on this herrrre site!

January 3rd, 2008

So I couldn’t come up with an exciting way to tell you that I’m testing out Google Adsense on my blog for the months of January and February. Sue me.

So here is how the ads work, why I’m doing it, and what my goals are.

How my system of ad placement works

I believe pretty strongly in the fact that subscribers, or frequent visitors, to a Web site do not really click on ads that often. Unless of course the ads are served in a personal way like on The Deck. The Deck has some really great products and services that are advertised across its network. Their motto is: “We won’t take an ad unless we have paid for and/or used the product or service.” so the author of the site the ad is being displayed is essentially saying that they vouch for that product or service.

Unfortunately, I’m not on The Deck, and I don’t get to pick and choose which ads Google decides to display on my site beyond their context. So I’ve come up with the following rules for how I display my ads, maybe they’ll work, may they won’t.

Ads display to the following people:

  • … that come from a search engine (i.e. Google, Yahoo)
  • … people that have not commented on my site

Pretty simple set of rules really. I have never, ever tried to boost this site’s traffic beyond just my writing so my site doesn’t get an enormous amount of traffic and as such I don’t really expect to make a ton of money off of displaying ads. But I figured by using these two simple rules, I’d be keeping the experience exactly the same for people that either come to my site often or participate in the conversations.

Oh, also of note: If you get to this site via a search engine, I double the number of ads you see and I even bring them up above the fold. Ads displayed above the fold normally do much better than those below, but frankly I think they are ugly, so I limit the number of times I do that to only hits that come directly from a search.

Why I’m doing it

This is an experiment, of sorts. Through the entire months of January and perhaps February I’ll be leaving this ad system on to see what type of return I can muster without being 1-bit obtrusive to the regular “audience”. If you visit this site regularly, you will probably see a single ad below the post. If you comment, you won’t see an ad. So it shouldn’t affect too many of you reading this right now.

My “return on investment” from all of you reading this, to date, has been in the conversations we’ve had and in general those coming from search engines do not take part in the conversation. We’ve talked about the traffic I get from Google Images and I wanted to somehow get some sort of return on that traffic. Again, I have no idea if this will work – but we’ll see.

What my goals are

I don’t have any hard number goals that I’d like to achieve, but I wouldn’t mind being able to buy myself one lunch per month off of this site’s ads. Seems like a low goal? Remember, this is a personal Web site with a very small number of subscribers, less then five-hundred posts, and I only manage to write on here when I find the time. So how much does a good lunch cost nowadays?

I hope you all understand my reasons for doing this experiment and that it works well enough to stay out of your way. I guess the only thing I can say is, if you don’t like the ads, comment!

PS. If you don’t see any ads on this site, that means the ad system is working.