Byte of the Week

Today’s Byte is probably of most interest to anyone who runs or is thinking about online ads. (For those who aren’t interested in online ads – here’s a quick fun site on the Super Bowl ads http://www.superbowl-ads.com.)  

Google and Yahoo/Overture are the two biggest pay per click vendors. They sell ads on search engines and their content partners sites. Advertisers buy ads through a bidding process and only pay when visitors click on their ads.

I have always loved Overture because they have always made their ad processing very transparent. You can see who is bidding for your terms, how much they are bidding, and you can see their ads. And their ranking was only based on the bids.

Well this week they are making changes. They will no longer rank ads purely based on the bid per click. Now they are also taking popularity of ads into consideration. They claim that this change will allow people to focus on quality of ad, not budget. I have found the opposite to be true; it’s made the system less straightforward for those of us who were OK with taking the time to research terms, prices, and ad copy it takes away our competitive edge that previously made up for lack of deep pockets.

Google has always ranked ads this way. I suspect Google makes more money and so it makes sense for Overture to change too but almost consistently I have been able to build better campaigns for people on Overture versus Google. There are some terms where this hasn’t been true but overall it has.

Also there are times when you don’t want a blindly high click through rate such as when you run a broad ad with a geographic qualifier in the ad copy. For example you might buy “shoes” but include Minnesota in the ads so that only people in Minnesota click through the ads. This reduced click through rate will now impact the ranking of these ads.

So there’s my two cents on Overture and their latest change. I manage ads for a few folks on Overture and so far there hasn’t been a great difference but the real changes are slated to begin on Feb 5 so we’ll see if the ranking algorithm make a difference to the budget or click through rates.

OK Today’s Byte is really long – but I’ve tried to break it up with a Q & A format. I think the Byte will be of greatest interest to nonprofit organizations that have web sites.

Last week I gave a presentation on online ads and sponsorship at the Minnesota Council of Nonprofits Annual Conference. I gave the presentation with my friend and fellow search engine junky, David Erickson. (David posted the presentation on his site http://www.e-strategyblog.com/2006/10/online_ads_spon.html.)  

A couple of question came up during the presentation and I thought I would answer them here:

Do you have a sample link policy for folks who might link to my site?

You can’t really stop anyone from linking to you. A “link” is an address and addresses cannot be copyrighted. Copyright becomes an issue when someone copies your content and posts it on their page.

The Texas Department of Information Resources does a good job of outlining the links they encourage and “links” they don’t allow (http://www.dir.state.tx.us/standards/link_policy.htm). The bottom stuff gets into government stuff – but the top paragraphs are pretty useful.

The March of Dimes has a pretty strict policy (that requires linkers to agree before linking) but it does allow folks to use their graphic for a link.

Do you have a sample link policy to help us decide which links to include on our site?

Above all else, you want to make sure that your links are helpful to your visitors.

The Educator’s Reference Desk (http://www.eduref.org/linkpolicy.shtml) has a nice link policy that I think actually helps you decide what to include.

First Gov for Kids (http://www.kids.gov/linkpolicy.htm) does a good job explaining their criteria to potential link requesters.

Minnesota Revenue (http://www.taxes.state.mn.us/taxes/home_con/link_policy.shtml) has a more business-like policy.

Do you have a sample sponsor policy?

We were talking about seeking sponsors for web site; in short people who might be rewarded for a donation with a link or banner link on your nonprofit web site. On the one hand it’s nice to get money; on the other hand some sponsors might have goals or reputations that conflict with your own. As I did the research I realized (and remembered from my days in service-learning) that this issue is much larger than the web. If you want a scan of all of the issues, do a search on “nonprofits taking tobacco money”.

For the Byte I can only say that I’d start by looking at the link policy (using resources above) and if someone didn’t make the cut without a “donation” then I’d have to think long and hard about adding them just for the money. Or it would have to be a lot of money. Ask yourself, is it a site that your visitors would find of value and would you be proud to be associated with them?

Do you have to report revenue generated from online ads (such as through a program such as Google Adsense https://www.google.com/adsense/)?

I talked to my accountant and he said, yes. He also said ask a lawyer – but I looked online instead. NonprofitExpert.com (http://www.nonprofitexpert.com/income.htm)  had a nice article on earned income or unrelated business income. It doesn’t address online ads specifically, but I think it addresses the issue.

Today’s Byte is a big happy testimonial. I buy keywords for clients. I generally buy them from Google (http://www.google.com/ads/) or Yahoo/Overture (http://www.overture.com).  

The keyword ads show up on search engines and various partner content sites. You may be able to picture them on the side of your search results listed as “sponsored links” or as “ads by Google.”

When you buy keyword ads, you only pay when someone clicks through to your ad (or pay per click). People bid on how much they will pay so the price is set by the market. The lowest bid allowed is $.10 per click. The highest bid I’ve seen is $12.00 per click. Usually they range from $.25-$1.50 per click.

Yahoo/Overture (which brokers ads for a several search engines) lets you bid on terms and set daily and monthly limits. So you might set a limit of $180 a month or $6 a day. That is the limit we set for one account. So, imagine our surprise when we chocked up $300 in one day!

I was pleased to find out in their small print that if you go more than 15% over a budge amount you may be in for a refund. Well, we contacted them and they agreed to refund all but $6 of $300 we spent that day.

So, the lesson learned is that Overture has a refund policy IF you have set a daily and monthly budget and they will stand by their word. I have learned in past lessons that budget limits are always a good idea – if only to stop a high clicking streak. Too much of a good thing is still too much.

Last week I talked about placing ads on other web sites to generate traffic to your own web site. In February, I talked about placing affiliate links on your site to generate revenue. (Affiliate links are links on your site to specific products, such as an Amazon book, and getting a portion of each sale made through that link.) Today I’m going to talk about placing Google Ads on your site.

Google sells ads to customers based on keyword terms. Those ads might run on the Google site or content partner sites. Google Adsense is the program for potential content partners. If you have a web site you can partner with Google to have them put ads on your site.

I have done this for two sites now; both were nonprofits. The whole process takes about 30 minutes. Signing up takes 10 minutes – but then you have to wait until your site is “approved”. This takes 1-2 days. Once you are approved if takes 10-20 minutes to paste the html that they supply (determined by a few choices you make on size, shape, and color of ads) onto the pages of your site where you want to place an ad.

Google has some restrictions on the type of site they will accept. They don’t want to be part of a site that is a compilation of ads. They also don’t want to be listed on pages that could be considered illegal. Other than that they are pretty open.

They ads that they will feed to you will be based on the text of your page. So if you have a site on how to grow flowers, they might push you ads about a Home and Garden show. You get paid when a visitor to your site clicks through one of the ads. The amount that you will earn varies depending on the amount that Google is charging for the ads and since ads are generally purchased through a bidding process the range can be great. Google will send you a check once you earn more than $100.

I’ve read the stories from people who make their fortune through Google ads. This hasn’t been my experience, but it does seem like a decent investment for 30 minutes of work IF you have a site that is content-rich and you don’t mind if people click away from your site. In other words if the goal of your site is to have visitors buy something from you then I would not suggest Google ads. If the goal of your site is to provide information and generating revenue would be a welcome surprise, they I’d say go for it.

I’m actually waiting for the approval to add the ads to the Byte page – just to see how they do on a commercial site. I’ll be sure to report back. Learn more about Google Adsense from their web site.

Buying an ad in a magazine or newspaper is simple. You pay your money, you design your ad, you choose your space, and they run it. Buying an ad online, especially through a search engine is not that simple. Below is some of the terminology to help you understand online advertising.

Pay for Inclusion (PFI) - this is when you pay a fee to a directory or search engine to get listed, or to expedite the process of getting listed, or to “enhance” your listing. Yahoo currently charges a fee for inclusion.

Pay per Click (PPC) – this is when you pay for a “sponsored” listing; however you only pay when a visitor clicks on your ad and visits your site. On content (regular) web sites you might select a page for your ad, Search engines allow to you choose a keyword term, then your ad appears when a visitor uses your term in a search.

Data feeds – this makes sense for sites that have a catalog of items for purchase. Sites such as Yahoo, Froogle, and BizRate ask you to send a “feed” of your database of items and they will index your products on their shopping sites. Often these services charge on a Pay per Click basis.

Affiliations – larger sites, such as Amazon, place ads on content (regular) web sites and pay only when a visitor clicks through the ad and makes a purchase. Unlike the other ads described here, affiliations are generally controlled and maintained by the vendor. (Next week I’ll talk about affiliations and other programs that might help generate revenue if you have content site.)

Some web sites will still run the simplified pay-per-month type of ads. Similar to the print ad, you pay your fee, choose your placement and they run your ad.