Ads Are Content: It Doesn't Pay to Separate Church and State

Aug 20th

Any independent webmaster who has been making good money on the web for a few years has realized that blending ads in content, or distributing ads as content, is much more profitable than a clean separation of church and state. Jakob Nielson recently wrote about usability research showing that people ignore ads unless they look like content and are in the content area of the page. Once a publisher has enough distribution they claim it is unethical to blend content and ads, but if you look close enough at the publisher and advertiser relationships there are overlaps in virtually every category and on every site. There are numerous well known sites in the search space that would never give me any exposure until AFTER I bought ads at their site, which mentioned me regularly after my ad buy.

Here are a few examples of how ads influence editorial:

Some advertisers get mentioned just because they advertise a lot, while many publishers create content around high profit niches, and others organize their editorial content based on votes and usage data that can be bought (indirectly) through their ad network (think StumbleUpon and Google AdWords).

If your solution to the issue of low profit margins in publishing is to aggressively blend low value ads then you are eventually going to fail. As a publisher then there are at least 7 major ways to compete against others who are practicing and profiting from the blend, without being labeled as unethical, or undermining your own growth potential:

  • branding & positioning: create a brand or service that sounds informational and content-like even though it is an ad (think Bankrate, which likely pays virtually nothing to syndicate their ads as content to many major newspapers)

  • free samples: much like Bankrate syndicates information to newspapers you can also allow people to access a lot of value for free, then charge for a deeper access (think Compete.com profiles and their Search Analytics product)
  • segregate: keep your main content stream free of ads, build authority, and create an offers section on your site
  • be pure: don't publish any ads, wait until you have a strong brand, and then launch a better business model than competing channels
  • indirect revenues: use your site to build mindshare, brand awareness, status, and expertise. then cash in on that via indirect revenue streams
  • move yourself up the value chain: instead of selling AdSense or similar related ads, sell one of your own products and services. you can typically place these ads in-line without as much scrutiny or brand damage as blending someone else's ads in your content (see below)
  • free user content: if you can create a platform and rule-set that allows others to build value on your idea while drawing enough of an audience to sort signal from noise you can profit heavily from that (think forums, Technorati tags, Yahoo! Answers, Digg, or Google)

Do you have any additional ideas for profiting from integration without being labeled as unethical?

Published: August 20, 2007

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Comments

Kris from Florida
August 20, 2007 - 11:56pm

How about building or designing a website, or even better a brand , around a product .
Basically you develop the site with the product in the focus, so every tool, info, content on the website helps you bundle it into a website .
When the visitor comes to your site, you will have all the resources about that niche and your website will become authority and sticky in that niche, if you do it right people wont know the commercial interest behind your presence .
For example:
kbb.com in the automotive market, business model is getting paid from new car leads, new car loan leads etc..

but what you see is the endless info they provide about cars for people who want to sell/buy/shop for cars .

August 21, 2007 - 12:07am

How about forming relationships with advertisers that will provide quality content for distribution on your quality site?

PS: Is integrating ads with content unethical? Oops... I'm going to hell. So are a lot of newspaper and magazine people... Or did I misunderstand your message here?

August 21, 2007 - 12:16am

Hi Kris
That is a good way of doing it. Beckett.com does that with sports cards too. Auction house, direct sales, etc.

Hi Paul
It is not that integrating ads within content that is unethical, but leading editorial channels and networks want the end user to believe that they never do it...that there is a church and state division between ads and content. See Jakob Nielson's article for mentions of unethical stuff.

August 21, 2007 - 12:39am

For some reason I'm a fan of publishing ads from the start. I think that it leads people less likely to complain when you implement them in the future

Ed Welch
August 21, 2007 - 1:06am

Hey Aaron:

Your posts are like big juicy steaks - they take a while for me to chew up and eventually get processed. Regardless, you really do make me think man.

Thanks,

Ed

August 21, 2007 - 1:06am

Google as publisher/search engine does have division of church and state, and of course they derive their success from the sanctity (perceived) of their organic listings.

CraigsList is 95% Church and only 5% State, and thus their huge authority.

Bankrate's authority is undermined by the fact that many people *do* see through the fact that their "content" is really 99% ads. Despite this, they are fortunate to have many lines of defense in place to protect their model against competition.

Still, their model may ultimately be disintermediated due to their sins here.

You are on dangerous ground here.

August 21, 2007 - 1:14am

Hi Paul (PEK)

Google as publisher/search engine does have division of church and state

In the minds of many people they do, but I highlighted a couple ways that they blur together in the above post.

August 21, 2007 - 1:22am

I read Jakob's article, but I had a slightly different take on it.

He indicated that his research on ads, which would be available at his next conference, was considerably better than what one would get from something like crazy egg.

My own take was he was to advertise for his conference as opposed to actually giving out any good and free information.

August 21, 2007 - 1:27am

"Do you have any additional ideas for profiting from integration without being labeled as unethical?"

Set yourself up as a service. Price comparison engines, niche news sites ('new product launch!'), review sites, etc, all make their money by advertising, yet, because that is essentially what people sign up for from day 1, there is no ethical question & no negative brand impact (as long as the review/comparison system appears just).

August 21, 2007 - 1:36am

I like michael webster's comment. I always think Jakob Nielsen is a ridiculously smart promoter. For example, his recent "Web 2.0; Same Old Usability Problems" speech hit all of the major news outlets & positioned him & his company as newly relevant. Not to mention opening the potential for many of his old clients to re-check in asking "we've just put together this web 2.0 stuff, what do we need to do to make it usable?"

Or perhaps that's cynical...

David
August 21, 2007 - 5:23am

If your solution to the issue of low profit margins in publishing is to aggressively blend low value ads then you are eventually going to fail.

I have to say reading the posts here makes me depressed more often than not. ;) Depressed because I can see the truth in them.

Basically, for me anyway, turning off that revenue stream is just too hard now, the money just keeps coming in day after day, not at a get-rich-fast level but at one that I'm fairly comfortable with. The only thing I can think of is to maintain different kinds of sites, adsense whores and more long-term, valuable plays.

David
August 21, 2007 - 6:21am

Another thing is to sit down and work out how much of what you are earning is in excess of your expenditure, or how much you are able to save each month or year. If it's a good amount it might make sense to keep being an adsense slave for as long as it lasts, save, invest, develop another passive income stream, one that is not dependent on google, just the markets. ;)

Justin
August 21, 2007 - 8:11am

We've been trying to get into a trade journal covering our industry since we started our business, about 3 years ago. Every year they publish a comparison chart covering our product type. This year we're being included and they are leading the story with a blurb about us. And guess what? We've also got a big ad right next to the article.

btw this blog is the only one in my RSS reader that I read in it's entirety. I don't know how you produce the quantity of quality posts that you do, but keep it rolling!

CA
August 21, 2007 - 9:17pm

One way to do it, would be through selling text links. Creating a site which appears editorially pure, and selling links within content which just look like editorial citations.

You could also blend that idea with an idea contained within your post. Use your trust, coupled with how much easier it would be to build links, to recommend a related product to your visitors.

However, I probably think the easiest thing to do would be to sell brand ads. Someone wrote a good post about how Gawker aim for $30 cpm. I would imagine their sites could not get that with adsense - even if they were integrated with content.

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