Which Advertising Model Will You Choose?

Last week I launched into a series about creating an advertising program on a small web site. Let’s address a major question: What will you offer advertisers?

One disclaimer: Any advice I give after this point assumes you’ve aggregated an audience advertisers want to reach. Specifically, your site is focused on a niche, it has at least 30,000 visitors a month, and you have the email addresses of at least 5,000 of those visitors. If you have these things, I’d say you have something worthy of an advertiser’s attention.

I’ve seen two successful ways small sites tackle the issue of what to offer: a paid directory and content sponsorship.

The Paid Directory Model

The paid directory model works just way it sounds — advertisers pay to have a link. The link usually leads either to a single web page about the advertisers or directly to the advertisers themselves.

The first trick with a paid directory model is figuring out how to make the directory the most viewed page on the site so that you are selling the same impression over and over again. (We’ll talk about how to do that in a future installment.)

The second trick is to give the advertisers exposure across the site’s multiple ad vehicles, including everything in the price. Give them plugs in your email mailings. Give them banner ads on the site. Give them the ability to insert their messages into any communication you have with your audience.

So the offer goes something like this:

• A listing in our directory of sponsors
• A mini web page on our site (with a link or a request-for-more-information form)
• Rotation of your banner throughout the site
• A plug in the site’s email newsletter
• Right of first refusal on any other ad vehicles the site comes up with

The pros of the paid directory model are:

1. It’s simple to set up — just a link and a web page.
2. You can sell a lot of them easily (just more links in the directory).
3. You are leveraging your low-dollar inventory by folding it into the offer for your directory sponsors.

The cons of the paid directory model are:

1. There is a natural cap on how big the directory can be. (You can’t have 1,000 links, for example, and still display it on a single page.)
2. There needs to be some way to rotate the listings because sponsors on the top will always get more clicks than sponsors in the middle or on the bottom.
3. The model only really works for sponsors selling high-ticket items in which just a handful of sales means a lot of profit.

The Sponsorship Model

The sponsorship model consists of selling an advertiser the exclusive right to advertise on one or more particular pieces of content. The tricks in this case are creating the content and getting the advertiser to leverage every opportunity within the pages of the content.

First, the content has to change with some frequency to keep the audience interested. And second, someone has to work with the advertiser to make sure its brand image is properly represented throughout the content area.

In the sponsorship of content model, then, your offer would be something like this:

• Exclusive sponsorship of a content area
• The sponsor’s logo incorporated in every banner, button, and graphic in the content area
• Text ads included in any email communication with readers of the content area
• Right of first refusal on renewing the sponsorship

The pros of the sponsorship model are:

1. It can bring in big money.
2. It’s scalable.
3. You can offer “interaction” with the audience through surveys and feedback.
4. It allows for a tighter integration between the content and the advertising; in other words, the advertising adds value and enhances the content itself.
5. The model forces you to segment your audience, which means more opportunity to give them exactly what they want.

The cons of the sponsorship model are:

1. The sponsorship fees need to cover the cost of producing the content.
2. Adding a new sponsor means adding a new content area.
3. You have to be careful about maintaining editorial integrity.
4. You need some way to allow a sponsor to integrate its image into your site design. This might be through a designer or the use of a template.
5. Again, it really only works for sponsors that are selling high-ticket items and can accept honest criticism of their products and services.

So mull over these ideas until next week, when we’ll talk about how to build a site to accommodate each model.