Note: This is one of a series of posts from the America East 2007 conference in Hershey, Penn. (See more coverage from the first day of America East .)
America East: Online Revenue Models
Tracking revenue is important for understanding your online newspaper’s revenue potential, setting realistic goals and more, Robert Granfield, vice president of consulting services for Morris DigitalWorks, said. It’s much more effective to calculate the total online potential (selling every online ad space possible by category) when your accountants can track where the money is coming from. And understanding the potential of our online newspaper allows managers to set positive goals.
The CPM Sales Model: In a humorous moment, Granfeldt imitated the “stunned look” on the faces of some print sales reps when an advertiser asks about advertising on the Web. “By not having our sales reps prepared with a simple system they can execute… we’re just saying ‘I’ll have someone call you,’ on a really hot lead,” Granfeldt said. To help get that “stunned look” to go away, Granfeldt went over the basics of the CPM sales model (cost-per-thousand impressions) and maximizing revenue potential on the Web site using CPM. “Make it simple,” he said. “Right now, we just need to sell the eyeballs…. That’s what advertisers understand.”
Having 17 ads on the homepage, for example (which apparently was the case at one Morris newspaper), isn’t really effective, Granfeldt said. He advocated the “ABC(D)” model, where there are three or four standard, set ad placements on the Web site. He said sales are easier and the ads are more effective when there are fewer (but larger) ad placements and sizes. “With this model, we’re actually able to set our rates,” he said. It’s also easier to budget, it allows the sales reps to react effectively to hot-leads because they understand the system better, the pricing is more consistent and it creates opportunity for national banner sales. “We really demystify it and make it easy,” he said.
"If your site will not fit an ABC layout, get the changes made," he said.
The information you need to have/things you need to do are to determine the number of sellable impressions, determine the CPM for each ad position and use those numbers to calculate your online advertising potential. (Remember the ad placements are not all equal and some – the top positions – should be more expensive than others.)
Granfeldt also advocated getting a process in place to get online ads to show up faster – it highlights the effectiveness of the advertising quickly, and they may lose enthusiasm about the Web ad if they have to wait weeks for the ad to show up.