Does having only 20 uniques a day mean that you’re never going to get an ad? Some quarters have been trying to convince bloggers this is the case, instead of acting more constructively to help them solve the puzzle. What is the solution then? Easy! Move from a traffic-based compensation plan to a performance-based one, i.e. from cost-per-impression (CPM) to cost-per-click (CPC) or cost-per-action (CPA). You can even run both models simultaneously. While a CPM model pays (or is sold) based on the number of visitors or ad impressions, the CPC model pays based on the number of clicks received and CPA pays based on the completion of pre-defined actions. This creates a level playing field for everyone, because you could have a small website but high-converting traffic. Search engines like Google use the CPC model and thus, can afford to show ads on millions of websites regardless of traffic since they pay based on the number of clicks generated. On the other hand, credit card companies pay up to US$120 CPA through affiliate programs, so even a small website have a chance of earning big money. Thus, the ad networks need to educate advertisers about these different models, something I’ve been harping about for a while now. It’s a win-win solution for both advertisers and bloggers. The advertisers get free publicity and only pay based on performance while all the bloggers have an equal chance regardless of whether you’re at the beginning or tail-end of the curve. This was what I suggested and hopefully, it’s being considered. I told you that I only wanted to understand the mechanics before recommending to my clients and to see if I can help improve their system. Unfortunately, I’ve been accused of being a PR person (and lying about it) by people like Harry Lee …naturally. Sensationalism and pointing fingers never help solve problems - more so if they’re baseless. If you are really trying to help your fellow bloggers, please suggest solutions instead! P/S: check out the updates on Why Nuffnang Will Fail post.
Hi Larry,
Nice post there. I agree with you that perhaps the model could be changed to CPC. Just like how Adsense does it, you never need to have any minimum unique visitors.
However, once they move to a CPC system, I foresee problems. Firstly, people will complain about the low revenue. Then they will compare to Advertlets. The list goes on.
Anyway, those who complain about the little money are not focusing on the real issue, which is the customer service.
Comment by ignorantsoup — November 18, 2007 @ 8:18 pm
By the way I just checked out your updates..
I think its wrong to put your photo up. Things are getting overly personal and its not healthy.
Well, Harry copied my entire post too. If I’m not wrong, another blogger complained and he justified it by saying that he placed a link back. Which I am not very impressed. Anyway my post are not very valuable, else I would take some action in making sure my posts are quoted and linked and not copy in full.
Oh well..
Comment by ignorantsoup — November 18, 2007 @ 8:21 pm
ignorantsoup: it could be a hybrid model, i.e. both CPM and CPC/CPA simultaneously.
CPM ads are displayed on relevant blogs, as selected by the advertisers, while “filler ads” are shown on the other blogs based on a CPC/CPA model. So on low traffic sites, say they convert just one gambling ad at $20 CPA for the week, that would immediately make them more than they currently earn.
Of course, the local advertisers have to be sold on these models in the first place.
Regarding Harry, all content should have the author’s permission before it is reproduced regardless of linkback - that is the law. Actually, you could write to blogspot regarding this plagiarism, tell them that the author refused to comply and demand a take-down. After a couple of notices, that site will be closed down.
Comment by Larry — November 18, 2007 @ 8:25 pm
Hmm..Thats a great idea for the hybrid model..Well done for suggesting it to Ming. It definitely improves things alot.
I’m sure Ming can do the job of selling this idea to local advertisers. They have done it for Nike and the rest into investing in Nuffnang’s system isn’t it?
Comment by ignorantsoup — November 18, 2007 @ 10:17 pm
Hopefully, the same model is adopted for the other networks as well, i.e. Advertlets and Blog2u, then we won’t have a situation of unsold inventory.
Comment by Larry — November 19, 2007 @ 1:22 pm
Would a CPA model before technically harder to implement? I think it might which could possibly drive costs up. And you need cooperation from the advertisers to also embed code on their sites I think, if not how would Nuffnang be sure that certain actions were completed.
I’m not sure of Nuffnang’s model. Is it a CPM one? Based on your post it seems like it is. How is the compensation like? Is it linear? As in if you have ten times the traffic, will you also have ten times the money?
I brought the question up because of the title of your post. You asked if the low traffic bloggers are for show. From my point of view, they are for show in the sense of what the advertisers can achieve by putting ads on theese low traffic sites which is probably minimal if not zero impact and that most of these sites won’t be getting ads and even with ads they might not get much revenue. However, they are not for show in the sense that it allows Nuffnang to sell to the advertisers the idea that they have a network of many sites as well as a large aggregated number of visitors.
For example, Xiaxue might have 100,000 visitors a day. 5,000 sites with 20 visitors can increase that number by 10%. It might not seem a lot, but I think it helps sell the idea of advertising on blogs.
I was also wondering - a good portion of these visitors might also be visitors to big sites like Xiaxue. So there might be some double counting involved. Not sure of how Nuffnang calculates its statistics but I wonder if they are able to identify unique visitors across all the sites on their network or only unique visitors to each individual site.
Comment by Ian Timothy — November 19, 2007 @ 7:10 pm
Ian: I don’t have all the answers - I only know that Nuffnang uses a CPV/CPM model.
Regardless, this suggestion applies to the other networks as well because as mentioned, they are likely to have a problem if they grow too fast and advertiser demand can’t catch up.
The intention of this post was actually to ask if low traffic blogs will ever get an ad so I guess my title’s a little confusing. I’ve never really thought about it but often wondered why NN and Advertlets like to advertise the number of bloggers in their network.
You’re right that CPA would involve pasting a code on the advertiser’s site to track conversion …unless the pages are hosted on NN. On the other hand, I think CPC would be easier to implement.
If Pareto’s law applies, then 20% of the bloggers would contribute 80% of the traffic. Assuming an untargetted campaign, it would make sense for the advertiser to target just the 20% since we’re talking about a small population here, probably with repeat visitors.
On the other hand, an advertiser has nothing to lose to show their ad on EVERY blog if it were a CPC or CPA-based, since they pay based on performance.
A blog may only get 10 uniques/day but what if they were high-quality visitors, e.g. expats? Hence, depending on the product/service, the blog could end up converting more than one which has hundreds of student visitors.
Imagine if the ad pays a high CPA (e.g. $10), the blogger would immediately earn more than they currently do.
Btw, your last question is a good one. Personally, I think they can only track the unique visitors for the individual sites.
Comment by Larry — November 19, 2007 @ 7:27 pm