As we begin our series on monetization and the business side of blogging, we simply MUST address the topic of banner advertising. Banner ads is usually the default way to monetize a blog. It just so happens to also be the DUMBEST way to go about it.

In this episode, I’m going to make it very clear where I stand on banner ads. Even though I’ve made quite a bit of money with banners in the past, I still believe it isn’t the best way to go for many blogs.

It comes down to some problems which I give the details below…

The 5 Problems That Come With Banner Ads

1. It doesn’t make much money at all.
2. It sends people away from your blog.
3. Readers hate them.
4. It delivers no value.
5. It makes a mockery of what you’re doing.

In this episode, I explain all 5 points – with backup. I also reveal the one SMART way to make money with ads. Lastly, I talk about the one situation where banner ads is really the only way to go for you.

And so we’re here with another episode of Coffee Break Blogging, where in this Episode 109, we are actually going to kick off our BIG series of episodes having to do with the business; the monetization, the moneymaking that we are going to talk about here with relation to blogging.

Now, we need to kick off this part of our series talking about “Banner Ads”; specifically, why banner advertising is actually the dumbest way to monetize your blog. This might come as news to many bloggers because it does tend to be the main way that people do it. People usually say, “Well, I am going to build up a lot of traffic, I’m going to put banner ads and affiliate links all over my blog and make it big!” Well, it just doesn’t work for most people. It just doesn’t work.

So as we begin this section on Delivery; the business side of everything, we just have to address this issue of banner ads. And I want to make it very clear where I stand on the idea of running banner ads.

I will say upfront that I went for many, many years making good money actually, with advertising. Now I did this in the technology niche, which is actually where I got my start in this whole blogging thing. I started a tech blog and that was the primary way that I made money. Down the road I dig it into selling my own products on the blog and that was actually what propelled it into the six figure range; going and selling my own stuff.

So I learned some lessons early on with regard to banner ads. But I am not going to sit here and say I didn’t make money doing it. The trick there is that I had a lot of traffic on that site. Now most people who are getting started don’t have that much traffic to their blog. And so if you are trying to make money that way, you are going to get discouraged pretty quickly.

With that in mind, let’s get started talking about the problems with using banner ads to monetize your blog…

5 Specific Problems With Using Banner Ads

1. It just doesn’t make any money.

Now if you are trying to monetize your site; especially if you are trying to build your income stream into something that is respectable or something that can get you out of a day job or what have you, that would be a pretty big problem if it just doesn’t work. You know, if banner ads just don’t make you money. Statistically speaking, according to “Monetize Pros” the average CPM, which is cost per thousand display of an ad is $2.80. So, 1,000 views of a banner ad in the average cost, industry wide for that is $2.80. Now the thing is, you, as a blogger, likely not going to be selling your own advertising.

What is probably going to happen is that you are going to go to a network of some kind like AdSense or something like that. So let us just say that you are getting a 70% publisher’s split from that. They get 30%, you get 70%. It’s probably pretty darn close to what you are going to get through AdSense and in many other networks. Now, 70% of $2.80 is a $ 0.96. So, for 1000 displays of an ad; let’s just put this in context here… That is 1000 page views on your blog; 1000 people came into your blog and they viewed something at least 1000 times, you make $ 0.96.

Now if you are impressed with a buck 96, more power to you. But I’m not. And if you realize how much work it takes to get 1000 people to come to your site, I think getting a $ 0.96 for all your hard work probably isn’t going to float your boat that much. But that is the reality you are facing when you are trying to monetize using banner ads. Obviously those numbers go up and down. The $2.80 figure wasn’t history average so some niches make more than that, other don’t, others make even less than that. So you are taking a 70% split of what is often a lower number.

It doesn’t matter what the final numbers are for you. The truth of the matter is that there is not a lot of money in banner advertising as a publisher unless you are running a lot of traffic because if you take 1000 page views, you get roughly that kind of figure. Well, obviously if you are doing a million page views this starts to add up in this respectable figures, then we are talking about a whole different ballgame.

So the only way to make good money with ads is to have a lot of traffic. Probably you are not going to be in that situation at least right away.

2. It sends people away from your blog and it does it for mere pennies.

So here’s the thing… You are doing all this work to get people to your blog… And I know that getting more traffic is one of the tough things that we are all trying to do with our sites. So you do all that work to get them there and then you desperately try to make them go away by putting other people’s banner ads on your blog! I mean, think about it… That is really the only purpose of that banner ad; it’s to distract the person and make them click and leave your site. That’s it. So your only money that you are able to make is by getting your hard earned readers to leave. That doesn’t make a lot of sense, right?

The other thing too is that your advertisers; they do not have your interest in mind. They are not trying to prove reader experience on your blog or anything like that. They are literally trying to steal the attention of your readers. That is how banner advertising works. They are trying to interrupt the person. They are trying to wave their hands and go “Hey! Notice me! Don’t pay attention to the other guy’s stuff; look at me!” so that they will click on that banner ad and leave your site. So that is a pretty big problem because it goes counter to what you’re trying to do with your own blog, doesn’t it?

3. Readers hate these things.

You probably do not enjoy going to banner ads. Nobody has ever said how much they enjoy the reader experience on a blog because of the ads. Those words have never been said anywhere. The truth of the matter is that ads interrupt the people. That is what they do. They are designed to distract. And actually, what happens is because these advertisers are just trying to get people to click on their stuff, the ads become ever more interruptive. It used to be the pop-up ads or the big thing and it doesn’t get more interruptive than that except that it does. Now, they have what they call interstitial ads or the ones where you try to go to somebody’s site and then literally the entire screen gets taken over by an ad and you have to click to continue.

So they are literally interrupting your desire to get to the page that you went to. Happens all the time on news sites, I’ve noticed. But they are annoying. They are really annoying! And readers hate them. So it just demonstrates the whole cross-purpose nature of this entire thing. You are trying to provide a good reader experience, you are trying to give value, you are trying to build a community and you are trying to maybe make some money as well, but yet you are putting things on the site that are specifically against all those purposes. Again, that seems like a not very smart maneuver.

4. It really delivers NO VALUE.

It is not valuable to your reader. Here’s the thing… We go back to what we are talking about on our Pit Stop Episode that just went away… We talked about why we call this section of the 7 Stages “Delivery”. Money is a result of delivering value to people who want it. That is how you are going to make your money. Now, here’s the thing… Banner ads, you are trying to make money off of your visitors by actually not delivering any value to them but actually making it less valuable for them because you are cluttering up your site. So you are delivering zero value to your readers with those ads. In fact, they probably hate you for it. So you are not delivering value. You are actually running the other direction very quickly. It doesn’t make a lot of sense, does it? You will be much smarter to actually think about how you can deliver value of your own.

5. It actually makes a mockery of what you are trying to do on your site.

You do all that work to build your community and your reader base but your real customer is the advertiser. I mean, think about it. Money is the result to delivering value, right? So if you are making money off of banner ads then the only person you are delivering value to is the advertiser; not your reader. So it is a bit of a mockery situation because you are acting and you are thinking that you are trying to deliver much value as you can to your readers but in reality the person that matters the most in this situation will be to deliver value to the advertiser because they are the ones paying your bills at that point.

So, money is the result of delivering value but the only value that you are delivering here is to the advertiser which end is probably the wrong customer. Or, if this is your business model then just embrace it and realize that the advertiser is your customer. Okay? If you go to news sites you will very often find that the very new stories they post are design to promote an advertiser. They realize that their customer is the advertiser. That is just the way that it is. And so if you are in that situation, realize that you are that guy. You are the person whose your customer, your client is actually the advertiser; not your readers. And just realize it for what it is.

So those are the big 5 problems. Again, in review…

1. It doesn’t make any money unless you have just got a ton of traffic.
2. It sends people away from your blog for mere pennies.
3. Readers typically hate them. They don’t like them. They are trying to block them in all kinds of things.
4. It delivers no value to anybody.
5. It makes a mockery of what you are trying to do; at least what most bloggers say they are trying to do with their blog.

So that is why banner advertising is really the dumbest way to monetize your blog.

How To Make Money With Banner Ads?

I’ll show you one smart way to make money with banner advertising… The only way to make money with ads is to be the advertiser. You be the one who is putting the ads on other people’s sites, not the one who is publishing them.

Now, we will be talking a lot more about that later up in the series because that is really the way that you do it. If you are the person who is putting banners on other people’s site, then you are the one receiving the customers, great. But you, thinking you are in the business of being the publisher and throwing ads and tags all over your site; it is just a losing proposition. That’s generally not worth your time. If you are running a boatload of traffic, realize that, yeah… you can make some money with that. I certainly did. But realize too, that with that quantity of traffic, you can make more money doing other things, in most cases.

I want to end off with this question and that is…

What if you are currently running banner advertising right now, what should you do?

Should you just remove everything and just listen to me and say, “I’m just not going to run ads anymore.”

Things To Keep In Mind

First of all, that in some markets it really is your only option, unfortunately. And the technology market that I came from is one that sort of kind of close there. Now realize that I did get in to selling information products, I actually started a membership site on my tech blog, and it worked. But it was not without some uphill fights. And the nature of that market; the technology space tends to be very news oriented. And the news oriented markets are typically hard to orient a product offering around.

If you back up many, many episodes here in Coffee Break Blogging; go back to Stage 1; we talked about the Transformation, that actually is the best markets out there… the ones where you are delivering a transformation to people. Well, with news, you are not delivering a transformation. They are there for news and same with politics. Political blogs; and I know people like to get to this kind of space because they like to bloviate about politics or what have you, but realize that it is not a good market for building a real business around it. And generally, it is going to be about advertising.

And so if you are in that type of market, realize that that really is going to be your primary business model; maybe that and a little bit of affiliate marketing. Embrace it and move on and just do it. But realize that your customer here is the advertiser, it’s not your reader. And you have got to realize that.

Now if you are not in a news or political market; if you are in a market where you can see that you are actually are trying to deliver some type of a transformation to your readers, to your audience, then I do encourage you to really re-think it if you are running banner ads. If it were me, and I really saw that transformation, I would remove all the advertising from it and I will concentrate on building my own internal assets. I would be looking at building my list; I would be looking at building products that I can sell to them. And that would be so much more effective; even with smaller traffic numbers than you are ever going to get by flopping ads and tags on your site.

And if you want to learn about this business model in full, then this is exactly what we do inside the Blog Monetization Lab. So, in order to learn about more about the Lab and have other people, other members and listeners of this podcast also helping you get over confusions; obviously, along with me, then I encourage you to check out the Blog Monetization Lab because that is where we are there. We are doing this every day and we are here to help. 🙂

With that being said, I will see you next time where we are going to start talking about “Products” that you can put together for your site.

I’ll see you then! 😉