New Economics of Advertising Joins Google FriendConnect Network

The New Economics of Advertising has joined the Google FriendConnect network. Look for the new widget on the left sidebar, sign-in using Google, and share with your friends. 

Join the new social network without walls.

Starting the Exitmercial Engines

Our president has been planning the new administration. We've been working and training a dozen publishers to start selling the exitmercial inventory - a change to benefit millions of bloggers and publishers. The qualification process will be changing. 

Bloggers are advised to install early to avoid the more stringent process, later.

Anchor Publishers

Publishers with existing ad sales will be integrating their online and print pitch. Futher, they will sell exitmercials for the entire tEarn network. These are the anchor publishers. 

Beyond robotic qualifications, anchors want the right to qualify other publications that join their vertical network. We have agreed. 

Joining a Microchannel

Any blogger or publisher can join tEarn. It's an open network.

To join high eCPM microchannels, a publisher chooses to join a category that matches their target audience. tEarn presents a hierarchial tree of these channels. Access these choices from your publisher panel.

We'll be deploying a mechanism to allow anchor publishers to qualify the partners in their microchannel. If you do not qualify, you still earn from lower eCPM exitmercials. 

We recommend you join early.

Stay Tuned for Announcements

As each anchor rolls out their plans, stay tuned to this blog for information. Subscribe to the 'New Economics of Advertising'. 

Exitmercials Push Visitors to Advertiser Websites

Ad buyers jump through too many hoops for low ROI

Online advertising creates friction for the ad buyer. 

Why do buyers jump through so many hoops to entice visitors to their website?

tEarn exitmercials solve the problem.

History of Advertising

Whether newspapers, magazines, coupon mailers, yellow pages, or TV broadcasts - an advertiser bundles their advertising with other content. Delivered as a media product, the advertiser is promised:

• A minimum circulation.
• Savings when compared to mailings.

Buyers pay a cost per thousand (CPM) like $50. When compared to minimum direct mail costs of $1.00 each, participating at $50 CPM is much cheaper than $1,000 CPM. Conversely, the $50 CPM has a cost per impression of a nickel, substantially cheaper than $1.00.

A magazine or Yellow Page book with 50,000 circulation would charge $2,500 per page - less for partial pages. This compares to $50,000 for a direct mail campaign via the USPS. 

That's the core economics of advertising.

Banners, Spots, Skyscrapers, and Other Display Ads

In 1993, I participated in the early phases to standardize online advertising. Cnet proposed banners. We pushed spots. ZDnet invented skyscrapers, initially to fill the extra space on the right edge of wide-screen monitors. 

Standards emulate print advertising.

• Advertisers supplied a creative image in standard sizes.
  
• Rather than show the same banner to every visitor, the practice randomizes - thus showing different ads to visitors. This made it hard for the buyer to find their own ad, since it may not show during their visit. 
• The ad server controlled delivery, to provide the buyer with the exact number of deliveries that they contracted for. The buyer can buy any quantity - not just the fixed circulation of the publisher. 
• Creative talents worked in the limited space to entice viewers to click and learn more.
• A click takes visitors from the ad to the advertiser's web site. This is a click through.

This high friction process has become a multi-billion business with billions of ad deliveries, but low click-through rates. 

Ultramercials (i.e. fancy interactive banners), in-game, in-video, and in-text advertising continue the tradition of ads embedded on a page. Each is a high-friction buy with typical single-digit or less click-through rates.

Enter Google Text Ads

Google created Adwords. Yahoo, Microsoft, and others copied the model.

• Buyers supply two phrases of limited length. One is the headline. The other is a tagline. 
• Copy writers struggle with catchy phrases to attract buyers.
• Buyers choose keywords that match customer interests to the advertiser's products. 
• With the complexity of synonyms, buyers often choose thousands of keywords to describe their offering.
• Buyers bid to pay a cost per click (CPC) or cost per action (CPA). When readers click on the ad, they are directed to  the advertiser webpage. Buyers pay only when clicked - a paid click.
• A robot controls placement of ads on a page and the order of ads in a column. Buyers don't control placement and frequency - creating frustration.

Despite this high-friction process, CPC has also become a multi-billion business. CPC solved the low click-through rates of display ads. Buyers pay when there is a click-through - a paid click.

As stated by the Google CFO in 2008 Q3:

"there is insatible demand for any paid click we produce."

• Efficient Frontier reports that CPC buyers pay from $0.30 to $0.60 per click. 
  
• Google has reported mortgage brokers who pay over $4.00 per click.
  

When compared to $50 CPM display ads:

• If 10% of viewers click-through, the equivalent CPC would be $0.50. 
• At average click-through rates of 1%, the equivalent CPC is $5.00. 
• At lower click-throughs, the CPC would be higher.

Average CPM rates have dropped. 

CPC has won increasing share of online ads. 

Buyers want click-throughs.

tEarn Exitmercials Push to Advertiser Websites

tEarn's patent-pending exitmercial system pushes qualified visitors to advertiser websites. 

• Buyers supply a website or webpage.
• Buyers choose a target audience.
• Buyers choose a CPC or CPA.

Exitmericials push relevant visitors - a paid push - 100% ROI by definition.

There is no friction from:

• Views that 99% don't see
• Banner creatives in limited spaces
• Effort to gain click-throughs
• Keyword selection
• SEO to optimize thousands of keywords
• Copy writing to entice clicks
• Fraudulent clicks
• Habitual clickers
• Accidental clicks
• Ad blockers
• Cookie-less

The paid push results in a website visit without friction. Buyers focus on their product, image, and website to retain customers. 

Conclusion

Innovation simplifies.

Buyers want hits on their website. 

tEarn pushes without friction. 

How many pushes do you need?

eBook, Self-Publishing, Starving Writers Gain Ad-Supported ePublishing

eBook, self-publishing, on-demand publishing - these ideas have been proposed for a dozen years. 

Rather than sell books, can an author earn enough from advertising to compensate his/her sweat equity?

The Writing Ecosystem

Ten years ago, BLOSM (i.e. By the Light of the Silvery Moon) analyzed the book publishing funnel. In rough figures, 10 million authors have the ability and would like to be published. 100,000 get published each year. 1,000 make more than $10,000 per book. The rest earn a small advance.

The ecosystem fails authors, publishers, and the reading public. Only book retailers, with full rights to return unsold books, benefit. 

How the Internet Changed Writing

Today, the publishing business is still centric around selling a bound volume. Internet success stories include:

• Amazon extended the life of Long-Tail books through on-demand publishing and a huge inventory of titles.
• Amazon has gained traction with the Kindle. Sony has had some success with their eBook reader.
• Bloggers have gained fans and tested ideas through their blog; and won publishing contracts as a result. Problogger has reported on his and other successes as a book author.
• Hundreds of top writers have blogs - to extend the marketing of their works beyond the publisher efforts. 
• Thousands of great writers have published online, gaining millions of fans. But, at eCPM of $1.00 or less from CPC ads, these popular writers have not been able to sustain via advertising alone.

BTW, ebook is green. We save trees; gasoline to drive to the library or the book store; the massive waste to move books from forests, to print shops, warehouses, retailers, and a home; and equal waste to recycle or dispose of old books. If you prefer the form factor of a book, for the sake of the environment, buy an iPhone or an eReader.

The Ad-Supported Book Model

An author and his friends approached tEarn with the idea for ad-supported books. Rather than ads that clutter the pages of his work, exitmercials appear between the chapters of a work. Sample works online include the classic works of Jane Austen and some non-fictional works. 

We extended our exitmerical features to support the effort. This includes better display on an iPhone as an eBook reader (i.e. 10 million and growing) and large screen TV's (i.e. 26% of home users) where one can read while sitting in the comfort of a couch.

• At estimated mature value of $0.30 per adpack view and a 10 chapter book, we estimate that each reader is worth $3.00 gross. This beats the royalties of less than $1.00 earned through book publishing.

• With just a few thousand readers, success of the model beats the advances available through publishing. Thus, niche non-fiction and fictional works can benefit - without print. 

• Further, the model scales. Works can become best-sellers scaling through the Internet to reach millions of fans. Low-friction access to content requires no credit-card commerce. Great works can be supported solely by advertising revenues. 
  

Can Exitmercials Support Starving Writers

Can high eCPM exitmercials support starving writers? 

We're monitoring the results with this group of authors. Success brings benefits to both readers and writers without friction. Let's wish all the best.

To learn more, visit http://onlinepublishing101.blogspot.com/

New Media: The Problem is Monetization, The Solution is $50.00+ eCPM, Part 2, PPT

Link to Part 1
Link to Part 2

New Media: The Problem is Monetization, The Solution is $50.00+ eCPM, Part 2

Link to Part 1

Exitmercials for $50+ eCPM

Embedded ads - like Google AdSense, Yahoo banners, or video spots - have failed to generate high eCPM for publishers. According to Techcrunch,  embedded ads cluttered on a page "serve neither advertisers or publishers."

tEarn introduces a new model to support publishers - the exitmercial.

• The tEarn exitmercial presents full page ads. 
  
• The ads trigger on exit from a website.
  
• The full page ads presents ONE advertiser at a time - engaging the reader's undivided attention. 
  
• These ads can be video, interactive Flash, animated images, or any page of the advertiser's website.
  
• Viewers opt into an adpack to interact with many, relevant ads.

Realizing High eCPM's for All Publishers

Why do exitmercials translate into high eCPM's?

• Exit Rate - Readers eventually click a link on a page to exit a website. The natural rate is 15% or higher. When compared to AdSense CTR of fractional single-digit, this translates into a 50+ fold increases in eCPM.
• Multiple Exits - If your site is a guide that directs readers to relevant resources, your exit clicks can be multiple exits per user. This translates into even higher exit rates.
• AdPack - Some readers, such as leanback visitors, will engage with the exitmercial adpack. By viewing multiple ads per exit, your ad views per page increase dramatically. 

Combined, these factors multiple to eCPM's that are 50 or more folds higher than embedded advertising. It's simple arithmetic that applies to all publishers.

Sustaining Higher eCPM's

As thousands of publishers join tEarn, does the model lead to oversupply and cause eCPM to drop? 

No.

tEarn introduces a unique, patent-pending targeting method. Rather than invading the privacy of user behavior, tEarn analyzes the social graph of the publication. Here is how it works:

• Publishers choose and join one of thousands of microchannels.
• Channels can be regional, demographic, interest-based, or any segment that clearly define a group of like-kind reader.
• Channels have a hierarchy where deep nodes automatically participate in the demand for advertising from the parent node. 
• The social graph of the publication's exit links qualify the relevancy of the publication to the selected channel. 
• Users visit. If they exit without clicking a link, they are unqualified and not served exitmercials. This applies to over 50% of the visitors at any website.
• If they exit via a supplied link, users have been qualified as relevant to that channel. An adpack is delivered on exit.

Thus, thousands of channels separate the billion Internet users by interest. Limited supply in each microchannel improves eCPM. 

$50+ eCPM is not a cap. It's the starting rate.

More to Discuss

Over 50 innovations define the tEarn exitmercial network. To get started, sign up at http://tEarn.com/. It takes minutes to become a publisher or advertiser.

Stay tuned for more discussions.

New Media: The Problem is Monetization, The Solution is $50.00+ eCPM

The global reach, near zero capex, and on-demand services of the Internet has spawned innovation among publishers, blogs, and web 2.0 applications. The problem is that over 90% of the new ventures depend on advertising to pay the bills. Fortunately, the bills are low, but $1.00 minus eCPM's stymy this renaissance of innovation.

How do we solve this problem?

Identifying the Problem

Low capital expenditures to develop and maintain information or other service websites leads to endless supply of providers. Whereas high printing and circulation costs limited the number of legacy publications, anyone with a computer can innovate and compete. 

Is oversupply the problem? 

No. The explosion of services provides the richness that excites the 1 billion and growing daily users of the Internet. Does the Mom in Indonesia want to share parenting experiences with the Mom in Boise? No. They don't share the same religion, nor speak the same language. Does the Dad in Michigan share work experiences with the Dad in Kyoto? No. Different economics drive the daily work flow. The world needs the diversity from millions of websites - and the services from their passionate owners.

The Internet continues to gain share of time - mindshare over other media formats. For example, Google still grows at 40% year over year on views. Thus, new media growth is exponential - bountiful to share among millions of providers.

What is the problem?

The problem is low eCPM's. And the common wisdom that this trend cannot be reversed.

Jeremy Liew, venture capitalist at Lightspeed Ventures, challenged entrepreneurs to create $50-million businesses that are ad supported. Mr. Liew states that at average eCPM's of $1.00, over 4 billion views per month would be needed to become fundable. The assumption is that $1.00- eCPM will continue, if not decline. Hundreds of analysts share this view.

Analysts further like the bigger is better model. Consolidation limits competition. It's an opinion that disregards the core history of publishing - which is to deliver value to a segmented group of readers. 

If the goal of every website is to reach 100 million viewers and 4 billion views - this forces entrepreneurs to reach for untargeted audiences. Techcrunch dominates start-ups in Silicon Valley. Now they need to write about politics and sex to reach broader audiences, but the result would be a less targeted audience that cannot be distinguished from hundreds of newspapers. The latter group is trying to change from regional dominance to world impact. 100 websites each with 100 million viewers would drive eCPM to near zero value.

The city of Santa Clara has 100,000 residents. The local weekly has 70,000 circulation reach. If the publisher is forced to reach for millions of viewers, then the paper and it's website would no longer be a targeted product. The limit is 70,000. 

Thus, the goal must be higher eCPM's for a constrained target audience. This axiom applies to local, B2B, vertical - all publishers.

The world can sustain 1 to 3 global providers that sell at $1.00 minus CPM's. This has worked for search, email, and video viewing. The world needs millions of targeted publishers, but they can't survive on $1.00 minus business model.

That's the problem - promoted by analysts who ignore the long, proud history of publishing.

The Solution is $50.00+ eCPM

To be continued... Link to Part 2