Looking to Double or Triple Your Online Ad Revenue?

Increase visit frequency and time visitors spend on your site.

March 2008 By Eric Shanfelt

multipage

With today’s analytics systems, there are so many online metrics to look at that it’s easy to get overwhelmed. In the end, however, there is only one traffic metric that really matters to publishers: page views. This metric is critical for a number of reasons:

• It measures reader engagement: the total amount of content consumed by your readers.

• It defines the inventory you have to sell to advertisers (more page views equals more impressions).

• It defines the inventory you have to market your own products for sale (e.g. books or other real-world or digital products).

• It defines the opportunities you have to market a webinar, lead-generation program, e-newsletter, conference, etc.

Let’s look at a simplistic example of how increasing page views impacts online advertising revenue. As shown in Figure 1, assume that on every page of your Web site you have:

1. a leaderboard,
2. a rectangle, and
3. a skyscraper.

If you sell your ads on a cost-per-thousand (CPM) basis, it’s easy to see how an increase in traffic can lead to increased revenue potential (see Table 1). But even if you sell on a flat-rate basis, as page views increase, you can charge more for the same position or add more advertisers into the rotation for each position while still delivering the same value (number of impressions) to your advertisers.

Too often we, as publishers, focus too much attention on tactics to reach more people (unique visitors), when we could grow our page views per month just as much—and often at a lower cost—if we just did a better job of getting the people we already reach to come back more often (visits per unique) and do more while they are on our site (page views per visit). This is reflected in a formula I call the Traffic Equation:

Page Views = Unique Visitors x Visits Per Unique x Page Views Per Visit

Table 2 shows the Traffic Equation in action, and how any one of these variables can multiply your site’s traffic and revenue potential. While the table is a simplistic, ad-revenue-driven example, the concept still works regardless of the number of ad positions you have, the price that you charge for the positions, and whether you sell at a CPM or flat-rate basis. If your primary revenue source is selling your own products to your readers, this table still applies, but represents exposure to your house ads and the opportunity you have to convert this exposure to sales.

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