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Did you know that there are more than 1.3 billion people online or approximately 20 percent of the world’s population? Men, women, children… tweens, baby boomers, parents… small business owners, corporations and governments… Every conceivable market has found a home on the net. That’s why you should absolutely consider online advertising. PricewaterhouseCoopers forecasts that this medium will represent 14 percent of global advertising by 2011, when in 2002 it accounted for less than 3 percent. So what are you waiting for?

Here is some important background information:

There are various types of online advertising including search and contextual, premium display, non-premium display and “other” (i.e. e-mail and classifieds). Although you can seek advertisers directly or utilize the services of brokers and other intermediaries, your best bet is to use an online ad network – which offers the most efficient route and very little work on your part. The Rubicon Project defines an ad network as: an entity that sells ad space to a network of buyers (advertisers) on behalf of a network of sellers (Web site publishers). Typically ad networks charge publishers a revenue share of between 35 and 50 percent; however, some programs go as high as 70 percent (in favor of publishers). Some of the most well-known online advertising networks are:

• Google Advertising Network (includes AdSense and AdWords)
• AOL’s Platform-A (includes Advertising.com)
• AdBrite
• Yahoo! Publisher Network
• ValueClick
• Specific Media
• Traffic Marketplace
• 24/7 Real Media
• Tribal Fusion
• Casale Media
• CPX Interactive
• Burst Media

Now if you’re wondering which network is the “best,” I can’t answer that. For some, Adsense is tops, while others achieve better revenues using ValueClick or AdBrite. This is something you will need to determine and tweak as you go.

Now how do you make money… Well, there are three types of pricing for ad networks (according to DeSilva + Phillips; Online Ad Networks: Monetizing the Long Tail; March 2008):

• Cost-Per-Thousand Impressions (CPM). Advertisers pay each time their ad is shown to a user.
• Cost-Per-Click (CPC). Advertisers pay when someone clicks on their ad.
• Cost-Per-Action (CPA). Advertisers pay an agreed amount when users buy goods and do other ‘actions’ such as subscribe to a service.

It is important to become familiar with each of these pricing schemes before making a decision on which ad network to go with. Do your research online and ask these networks lots of questions.

You’re also going to hear the term eCPM used a lot. This translates to effective cost-per-thousand impressions and is a great way to compare revenue across different channels and advertising programs. It is calculated by dividing total earnings by the number of impressions in thousands. Google Adsense gives this example on their site: If a publisher earned $180 from 45,000 impressions, the eCPM would equal $180/45, or $4.00.

Now for some, online advertising has a stigma associated with it - that it is unattractive and cheesy. It doesn’t have to be and today’s Internet users are used to seeing the various types of online ads that are served. Don’t be afraid to test the waters. You have nothing to lose and everything to gain.

Good luck!

Tags: ad networks, AdBrite, AdSense, AdWords, Burst Media, CPC, eCPM, online advertising, Tribal Fusion