Ads in Three Days
If it took Google just a few months to build support for text ads into its massive, highly customized system, one would expect smaller sites to be able to implement a text ad system in just weeks. Indeed, other sites have followed Google's lead and often report incredibly short development cycles and very few technical challenges.
One of the first small sites to implement text ads was MetaFilter (www.metafilter.com), a community Weblog. Matthew Haughey, designer and developer of MetaFilter, recalls that the idea came up over lunch with fellow designer, Derek Powazek. (Derek wrote "User to User Support," in the November 2001 issue of Web Techniques.) The initial discussion took place on a Wednesday in mid-October 2001. On Friday, Haughey spent $200 to license the source code for Ad Manager, a ColdFusion-based ad management package. Since its inception, MetaFilter has run ColdFusion. Haughey has become proficient in the language over the years, upgrading and adding features to the site. He estimates that buying the Ad Manager source code knocked a full week off his development time for this project.
Haughey installed the software on the MetaFilter server, a Pentium III 550MHz PC hosted from a friend's apartment. In addition to running ColdFusion, the server is loaded with Windows 2000 and a Microsoft SQL 2000 database. Some heavy revisions were required to the Ad Manager code, which was designed to serve banner ads. Haughey tweaked Ad Manager for text-only output and integrated it with PayPal for payment.
He launched the TextAds service on Sunday night, October 21—less than three days after he started coding—promoting it as "a non-invasive, non-annoying, low-cost way to get your site in front of thousands of people."
There was an initial rush of enthusiasm for the text ads, and advertisers reported astronomical click-through rates, some over 10 percent. Metafilter gets approximately one million hits a month, and Haughey took in $1,600 dollars in only a few days by selling ad positions at a $2 cost per thousand (CPM). (It took him a lot longer than that to play out all of the ads, though, because he displays only one ad at a time.) At one point he tried raising the price to a $4 CPM, but demand went down, and he returned to the original price.
Then the novelty wore off. Other sites implemented similar ads, and MetaFilter's click-throughs fell into the still-very-respectable 2 percent range. Haughey dropped the price to a $1 CPM. He now takes in $1,000 per month, rotating 40 to 50 ads at any given time. Although the revenues are extremely modest when compared to sites like Google, MetaFilter is considered by many to be the most successful home-brewed text ad site.
Haughey notes that the one thing that could increase the value of ads on his
site is if he were to let advertisers connect ads to keywords. He cites the
case of an advertiser that was looking to sell software for the Palm OS. The
advertiser told him that it would have paid five times as much if the ads could
have been displayed alongside every thread that mentioned PDAs.
Alas, given the nature of the site—unstructured, anything-goes Web logging—Haughey
doesn't see any easy way to connect ads to keywords. Analyzing massive
amounts of "dirty," unstructured data to retrieve keywords moves
beyond daunting to nearly impossible, due to his infrastructure, he says.
Nevertheless, Haughey is pleased with the success of the TextAds system on MetaFilter—a success that he attributes to an active community with strong common interests in Web development and Web logging. Many of the 250 or so ads placed since the October launch are from members of the community. The relatively high click-through rates show that the ads appeal to a broad cross-section of people who access the site. Haughey doesn't see text ads as a world-changing phenomenon, however, because many sites do not have this type of community or common focus, and thus would not be able to target ads effectively.
Off the Shelf
No doubt, the prize for fastest implementation of text ads goes to Web Developer Oliver Willis, who built a system for his site in about an hour. He used CGI-based WebAdverts shareware from Affordable Web Space Design (awsd.com/scripts/webadverts/index.shtml).
Text ads are growing so popular that there is now an open source, PHP-based package that site owners can use to get up and running quickly. The package, which is also called TextAds, is available through Sourceforge (sourceforge.net/projects/textads/). The package was contributed by Bill Rini, having developed it for his own site (www.rini.org).
"I was disappointed with traditional ads, through DoubleClick or other third parties—especially as the ad rates fell to $2 or $1.50, and they continued to take a big percentage of that," says Rini. "There's nothing hard about implementing text ads yourself," he adds. "So why let some other company be a middleman between you and the people who come to your site, taking 25 to 50 percent from an already ridiculously low $2 CPM, or worse?"
The TextAds package is designed to work on any Linux-based server running PHP, Apache, and MySQL. One planned feature is an option that allows pricing based on either impressions or click-throughs. Most systems apply charges based only on impressions.
It wouldn't be difficult, says Rini, to trigger ads based on user input and keyword searches. Rini explains that those using the PostNuke content management system, as he is, could easily key ads to the topics of the articles on their sites. But he acknowledges that at Web logging sites like Blogger, where people are uploading content via FTP, the problem would be more challenging.
It took Rini between 30 and 40 hours over a period of four weeks to write the code for the software. When he released the package in early February of this year, a brief mention on the MetaFilter site resulted in 100 downloads of the package within the first weekend.
On his own site, Rini has been seeing click-throughs anywhere from one-half to 3.5 percent, with the average being under 2 percent. His site receives around 3,000 page views a day. He charges $10 for 2,500 impressions, which is a high rate when compared to some other sites. However, he has been renewing the ads for free, making them a good value. The success is subjective, though. Rini points out that his overall profit from the ads is "absolutely insignificant." But Rini never expected his site to be ad- supported. "I'd be thrilled if it covered the co-location bill every month," he says.
Site owners who don't want to customize a software package or build their own text ads implementation can use an application service provider. Companies like TextAds.biz and Adfarm.org will host your customers' ads and serve them to your site. Prices can be steep, though. TextAds.biz charges 10 percent of the revenue on your ad sales. Adfarm.org charges $10 per 4,000 impressions; you get $7.50 of this for advertisers that you bring to the service.
Rini is skeptical about the usefulness of hosted services. "I'm sure with some of the hosted solutions, they put more expense and time into it than I did," he says. "But realistically, you should be able to set up and run a text ad service for a relatively low cost."
Hitting the Target
If you are considering implementing text ads, probably the best predictor of success is your ability to target ads to your users' interests.
If your site has some sort of search engine like Google, you can bank on your users to provide you with keywords. If your site has an active community, like MetaFilter, your users themselves might be ideal advertisers. Or if you have your articles in a content management system, as Rini does at his site, you can interpret a click on a particular link as implying an interest in a specific topic.
Growing "banner blindness" shows that most Web users, most of the time, will not be distracted from their primary pursuits. This contrasts with television, for instance, where people watch primarily to be distracted. If text ads are significantly outperforming banner ads, perhaps it is because they are a better fit for their medium. That, plus ease of implementation and the self-service sales and production process, make text ads an attractive and low-risk proposition for sites ranging from giant search engines to personal Weblogs.
Michael is a freelance writer based in East Sound, Washington. Contact him at [email protected].
