Selling Less Ad Inventory to Gain Marketshare

Some areas of the economy are going well still, but many are crumbling. If you are a publisher that monetizes via advertising one way to make up for lost earnings is to add more ad units to a page, but if something is not working then doing more of it is probably a bad solution for fixing the problem. If ad prices drop then adding more irrelevant and cheaper ads to the site will not do much for increasing your current revenue, and it might sacrifice some of your future revenue!

Another option is to show fewer ads to create a better user experience. Under-monetize today to make your site look more appealing, increase usability, be more linkworthy, and steal market-share from larger competitors. If the ad market goes too far out of whack you can always move from being an ad seller to becoming a strategic ad buyer. If you gain enough marketshare to tread water while competing businesses and business models collapse then you are doing well, while positioning yourself nicely for the rebound.

Then when the market turns up you can place more ads on your site and monetize aggressively while it is actually worth doing so. Then you would have higher monetization * better rankings & traffic * more ad units per page, with each input compounding the earning power of the next.

On some sites we only monetize key pages while making others white as snow easy to link at. For new sites I skip the ads until the site gets some links, starts ranking and has a solid traffic stream. I like to call this line of thinking conditional advertising, where you adjust your monetization strategy based on your site's market position and the condition of the market.

Buy low. Sell high. :)

Published: January 10, 2009

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Comments

January 10, 2009 - 3:34pm

Good thoughts as usual. I have been using a similar strategy to focus on better quality ads on my sites. Or removing ads completely in order to focus on some other site "goal" - i.e getting more feed subscribers, higher perceived value etc .

I also always assumed that the way that units like Adsense worked actually meant that the more units/advertisers there were on a page, the higher the risk of a click on a low bidding advertiser there was.

January 10, 2009 - 9:38pm

There are some markets where advertisers are quite deep...but most markets (especially now) pay less per click with each additional ad unit.

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