Web advertising is a different beast from typical print and television advertising, and comes with its own advantages (flexibility) and disadvantages (lower payout). The good news is that now that the Internet has been around for quite a while, web advertising has become relatively stable, so it's easier than it used to be to know what to expect. For sites wishing to serve ads or companies wishing to start an ad campaign, there are a few basics you need to know.
CPM
CPM stands for Cost Per Thousand ("M" is the Roman numeral) impressions. So for example, if you have a banner ad on your site that has a $2 CPM, you'll get paid $2 for every thousand visitors who see the ad. This type of advertising obviously works best on large sites with a good amount of traffic; with a lot of banners and page views, money from CPM advertising can add up very quickly. CPM rates for traditional banner ads usually range from $0.25 (very low) to around $6-8 (very high).
CPC
CPC stands for Cost Per Click. Instead of the website publisher getting paid simply by having visitors see the ads, visitors must click on them (and the payout is usually a few cents, but can reach up to a couple of bucks, per click). For this type of ad, the CTR or "click-through rate" is the statistic to watch out for, and tends to be higher for smaller, targeted niche sites: a popular gossip blog will typically have a lower click-through rate (perhaps less than 0.5% of total visitors) than a website dedicated to free web design templates (which might have a 1 percent or even 1.5 percent CTR). Google's AdSense program is the most recognizable example to use the CPC method.
Banner Ads
Banner ads, by far the most popular form of advertising on the web and used for both CPM and CPC campaigns, come in certain set sizes, measured in pixels. The most common are a 728x90 horizontal "leaderboard"; a smaller 468x60 version; a 160x600 vertical "skyscraper" and a narrower 120x600 skyscraper. Ads can also come in a variety of rectangular banners, the most common of which is 300x250. A newer 150x150 square ad has become increasingly popular on blogs thanks to the ease with which bloggers can position many of them in their sidebars.
Non-Banner Ads
There are plenty of forms of advertising besides banner ads. Aside from the infamous pop-up ads, there are also "pop-under" ads, which are pop-up ads that appear behind your browser window; "interstitials," which take over the entire page for a set number of seconds and usually give the visitor the option of clicking past them; and site "reskins," which usually consist of replacing the background of websites with a massive clickable image. Banners that display videos and allow visitors to play games, sponsored articles and "pre-roll videos," which play streaming advertisements before a video, are also common.
Ad Companies
Google AdSense is probably the most popular online ad program because it is available to absolutely anyone and has no traffic requirements. Burst Media and ValueClick Media (formerly FastClick) are two popular ad networks that serve ads to your site and take a percentage of the profits. Chikita and Text Link Ads are two CPC companies that place small widgets on your site. Amazon Associates is the most popular of many affiliate referral programs; you can link to products on Amazon, and if your visitors follow the link and buy the product, you get a cut of the profit. For larger sites, TribalFusion and GorillaNation are site representatives that buy campaigns for your individual site; they generally take 50 percent of the profits, but the payouts are also much higher.
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