This post is part of a 5 day series where we lay the groundwork for a startup to generate advertising dollars from agencies or brands. Note: while this is focused on startups, it could apply to any company of any size. The first post that sets up the series is located here, second post is located here, and it’s based on this presentation.
Today’s topic is Does Size Matter?
If you are a startup or a publisher, you generally often wonder at what point can you go out selling advertising against your userbase. Does the size of your userbase matter?
Historically, size mattered. You needed significant size because you generally couldn’t target specific audiences so you had to sell the entire media vehicle and account for wastage. With digital targeting, specifically audience driven media, you can now target with serious granularity. While significant targeting delivers your audience segment, the numbers are typically much smaller than a large site-direct or ad network buy, because you are just reaching a specific user base. For publishers who are still early in development but have a vertical or niche site, then you can begin selling ASAP because even 50,000 people who are into Ferrari’s and have $5,000,000 disposable net worth are seriously worth something to someone. If you have a way to package your audience segments, then start selling. You don’t need to wait until you reach 100,000,000 users to generate advertising dollars. Implement an Audience Management Platform and you’ll be on your way.
If you have a general site (i.e. portal, aggregator, etc) and can’t really segment your users, then it might be hard to sell against until you have substantial visits.
The question comes up often about what types of creative units you should accept… Start with the IAB Standard units because they are the most common. Any major agency is going to create using the IAB standard package and then add custom units on top of it. If you start here with implementing the 300X250, 160X600, etc – then you can fill those units. Just last week, the IAB released some Rising Star units which are pretty interesting as well.
If you have unique/custom units, then these are harder to sell because agencies have to create custom creative for it (production fee implications). Unless you have substantial size and buzz, it’s hard to sell custom units (not impossible).
On Monday, we’ll discuss the evolution of the pad online ecosystem consisting of Ad Networks, Exchanges, Site Direct, Private Exchanges, etc. It’s a topic I love and am excited to write about it.