People put advertising on their website to make money. The the phrase often used to describe it in the industry is “website monetization” or “monetizing your content”.
One of the easiest places to find sources of advertising for your website is an ad network. Ad networks serve people who own websites, typically called web publishers, and they also serve companies who want to place advertisements on those websites. They effectively bring the two interested parties together. There is another similar entity called an ad exchange, but we will talk about ad exchanges some other time.
As a website publisher, you provide essentially a “window” or a “space” on your website and you want to fill that with an advertisement. Your goal is to make money on your website. Depending on the type of ad that fills your space, you can make money when someone clicks on it (with cost per click advertising), or you can make money just by having someone show up on the page (cost per impression advertising). You can tell the ad network which kind of ad you want.
An ad network is essentially a middleman. With one hand the ad network listens to you, the publisher as you detail which spaces you want to fill and the type of people that show up on your website. Audience analysis is normally determined automatically by the ad network. On the other hand the ad network is talking to advertisers that want to sell or promote things. These are people paying money to find their target audience on websites all over the globe.
Here’s an example of how the interaction works. Let’s say you have a website that sells green duck eggs, that is your niche. You go to an ad network and you sign up. You then figure out where you want to place the advertising on your website that sells the green duck eggs. Then you go to your ad network and you specify the type and size of ads you want to fill the space that you have created within your HTML pages on your website.
Once you’ve done that the ad network will give you a little slice of code, also called a script. You cut and paste the script from the ad network and you place it in this space you’ve created on your webpage on your website.
Once you’ve placed the code on your webpage, the ad network monitors the traffic on your website. The ad network determines what kind of people show up on your website and which aren’t the best ads to place there.
So back to the green duck egg example. The ad network finds advertisers that are interested in your audience that shows up to consume your green duck eggs content. The ad network’s interest is not in your content, the interest is in the audience of your content — showing ads to the people going to your website to look your the content.
So now the ad network goes to the advertising side of their house and looks for advertisers that are interested in showing ads to people who are interested in green duck eggs. It’s not always clear to the website owner, you, who that might be. If you’re selling green duck eggs it might be other green duck egg sellers. There are ways to prevent your competitors from showing ads on your website. It might be products and services that complement or are somehow related to your green duck eggs.
So how do you get paid? Here’s an example. One of your web site visitors comes to the webpage you’ve placed the advertising on. They see an advertisement for duck feed that is running on your website that is about green duck eggs. The web visitor clicks on the advertisement and is taken to the advertiser’s site promoting duck feed. The duck feed advertiser has paid the ad network to put that duck feed advertisement on your webpage — let’s call it a dollar. So the ad network gets a dollar when someone clicks on the advertisement and then gives you $.60 of that dollar.
That’s what a middleman does. The advertiser pays a dollar to the ad network, the middleman ad network keeps $.40 of that dollar and you, the website owner, gets $.60. The haircut $.40, or the portion the ad network keeps, varies across ad networks.
It’s easy to find ad networks who will provide advertising for your website by simply going to a search engine like Google, Yahoo or Bing and searching for “ad networks”. Google is one of the largest ad networks around. But it is confusing when you first try to figure out how the whole advertising ecosystem works.
People with websites looking for advertising go to the AdSense part of the Google ad network. There you can sign up, be approved and ask for the script, or the code, that you insert into the spaces of your website that will provide advertising from the other side of the Google ad network which is called AdWords.