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The VP of Google Display Advertising, Neal Mohen, once commented on the DoubleClick blog in 2014:

Advertising helps fund the digital world we love today — inspiring videos, informative websites, entertaining apps and services that connect us with friends around the world. 

I can’t help but think about this on a regular basis with my project Concorde. I am happy to invest my time in building an informative website for free, but the ongoing operational costs are not insignificant. Each month that the site continues to operate, I owe money to each of the vendors who keep my service humming along. That’s fair — I am happy to pay for the business-critical services, such as web hosting, email marketing, email hosting, SSL certificates, code repositories, and access to flight data. But it’s also nice to be compensated in return for providing a website that thousands of people have now come to find value on a regular basis. So, what option do I have to make money?

The quickest and easiest path to monetization is online advertising. While the online advertising industry has developed an unpopular reputation, Google’s Adsense program is considered the gold standard and deploys a lot of effort to ensure their quality of advertisers and publishers are top notch. The headline on the Adsense homepage says it all:

Turn your passion into profit. AdSense is a free, simple way to earn money by placing ads on your website.

So, that’s what I did. I placed three square banner ads at the bottom of the Concorde homepage and the deals index page:

And that’s it. Now for every 1,000 pageviews of either of the pages mentioned above, I am earning about $10-20 on average, which is effectively $0.01 – $0.02 per view. This is really great news to me because it pays my bills, and it’s great for the Concorde users because it keeps the service free. What’s not to love about tasteful and thoughtful online advertising?

Yesterday I was flying home from Augusta, Georgia on U.S. Airways and I noticed that the monthly edition of the airline magazine contained enough subsentence to occupy my short and rare flight. However, I realized that the magazine is almost totally irrelevant to the the airlines most profitable customers, frequent fliers, who stare at the glossy cover next to the safety card several times every month. Allowing travelers to have Wi-Fi access is a trend that has fliers more fliers disregarding the airline magazine and seeking carriers with Wi-Fi for more productivity and personal entertainment.

Recently many of the major U.S. airline carriers have decided to go ahead with an investment in offering in-flight Wi-Fi for a fee, provided by the third party company Gogo, which operates under the parent company Aircell. The rationale behind the decision is that the airline executives believe their customers desire in-flight internet enough to chose one carrier over another, just for access to the internet. To support this belief, Mashable published the results from a recent survey, showing that over 3/4 of frequent fliers would change airlines to have Wi-Fi. Now, in March 2010, most airlines have taken action and are implementing the service on select planes in their fleet, which operate routes that would have a high Wi-Fi demand.

Now, why is this relevant to the airline magazines? For the passengers who subscribe to the Wi-Fi service, this will mean that their entertainment will likely be fulfilled via their Wi-Fi device, and not the magazine. The magazines exist now as a place for the airline to entertain their customers with reviews and promotions of destinations they serve and other mildly interesting travel articles. Meanwhile, the same information is available and more accessible with Wi-Fi, making the passenger likely to disregard any of the useful information within the magazine.

As fewer passengers become interested and engaged in the airline magazine, its likely that advertising revenues will drop significantly because the advertiser will no longer be reaching their primary target. Instead, the primary target demographic which the advertisers are seeking will be on the internet. In other words, the advertisers will likely look to reach out to these travelers through a new media form, the internet! Thus, the internet advertising world will yet again trump traditional media forms, as travelers become increasingly digital and mobilized citizens. While the addition of Wi-Fi service in flight is not a guarantee that airline magazines will one day be discontinued, it is certainly an indicator that the advertisers should modify their ad budgets to attract those customers again, on the internet.

Photo by RetroCactus under Creative Commons

Across the web there are countless platforms that enable “paid” media. In other words, you pay for the exposure of a brand/product that you want to be promoted. The problem is that it is harder to achieve earned-media, due to authentic time and effort, but the rewards are much greater if executed right. Earning your media has become a more popular marketing strategy for brands because it’s very cost effective compared to paid media. Recent innovations such as Twitter, Facebook, and other social media properties give a stronger leverage point for brands to earn their media.

When I read marketing news sites, I usually see something like “Advertising Revenue Predicted To Decline”. Yes, this is correct. Meanwhile, I continually see headlines such as “Social Media Advertising Revenue Increases Amid Recession”. Advertising agencies face the challenge of switching from traditional paid media, to “earned” media. So, with the marketing industry flipped upside down, only handful of agencies have been able to make money with this new marketing mentality. One of which is Crispin Porter + Bogusky, they were the master minds behind Burger King’s “Whopper Sacrifice” Facebook un-friending campaign.

Now, all of that is great for major advertising agencies and marketing executives to know, but how can that trickle down into affiliate marketing? If the appropriate social media/crowd-sourcing tools are used, a long term affiliate campaign can be successful with earned-media. Just take a look at already successful earned-media campaigns, and build your own from their. Just be aware that a lot of the time earned-media is involved with offline marketing strategies, so campaigns with strictly online actions would work most efficiently. Get started now with an earned-media affiliate campaign, performance pays!

Since the inception of virtual goods on Facebook, in Februrary 2007, the demand has rapidly increased. Facebook apps users play many of the thousands of apps available. Often the games that the users play are games that have shops that require points to purchase virtual goods. Why do the users want points? Simply to have something that will make the game more enjoyable, or enable them to attain a higher score. Why do app owners/developers offer virtual goods? The apps make money solely from either advertisements, or the better monetezation method: virtual goods.

Plus, users love virtual goods since many times in-game advertisements are eliminated, making a more user-friendly experience. Thus, users are happier, and more likely to engage in the virtual offers presented to them.  Virtual goods are becoming the preferred way to monetize social network applications. This is awesome news, considering that just last month (April) Facebook reached an astounding mark of 200 million active users.

So great, another growing opportunity to advertise online, but why is this important? The most important part is that the virtual goods/offers are largely coming from performance marketing advertisers. The same offers that are offered in Facebook apps are being published by affiliates elsewhere on the web.  However, most affiliates are unaware of this new trend or don’t see the volume. Performance marketing is already there, now just find your publishing spot in this growing market!

An example of virtual offers in the Are YOU Interested? Facebook application-

Down the road-

“The virtual goods economy faces hurdles. For starters, many of the offers themselves reek of scams — like ringtone sellers who don’t tell users that their mobile phones are going to be billed every month even if they don’t buy more ringtones. A longer-term risk is that people who take offers now might not want to take them later. There are only so many credit card offers that any one person is going to want.

But the dynamic at play — incorporating payments and offers into games — looks like it’s here to stay. For users, offers can be a win-win. I might think that getting a new pistol in Mob Wars will make my friends think I’m cool, and help me beat them at the game, so any way I can get that pistol is potentially good for me. If getting that pistol means signing up for some Netflix rentals at the same time — and if I already want to rent some movies anyway, then so much the better that I do it in the process of getting the pistol. More advertisers are looking at offer-based advertising, and if these companies can really nail the consumer-goods market, you can see how offers might get a lot more valuable. Teenagers might re-up on acne medication as they re-up on ammo, one day.”    – Eric Eldon of VentureBeat.com

I hope that isn’t too sententious, but really get involved with virtual offers in apps now, because they are serious money and a viable performance marketing opportunity.

Oh and by the way, “Facebook Money” is now the #2 Trending Topic on Twitter right now.

I was inspired to write this post after a recent talk with the MediaTrust CEO Peter Bordes about innovation within the internet marketing industry.

Online advertising spending is projected to reach $25.7 billion in 2009, and $42 billion by 2013. A 78% increase over 2008’s $23.6 billion in online spending.(emarketer.com) For an industry that is growing at astonishing rates, most of the companies that are heavily profiting have not put much back into researching and devloping new tools to capitalize on this growth in the coming years. To all affiliates out there, please name 3 recently released tools that allow you to be more productive, your campaigns to be more efficient, and ulitmately more profitable. Not so easy, huh? This lack of innovation will only hurt affiliates in the future. This is because the few networks that are investing in developing better ways to market online now, will blow past competition when growth slows. The affiliates who are associated with the networks that are investing in the right places will benefit tremendously, no doubt.

There are a few reasons for a lack of innovation by both affiliate networks and advertising networks. First, a lot of affiliate networks don’t care because there isn’t a lot of competition, and today they are growing strong. Their antiquated tracking systems work, and affiliates continue to promote their hot offers, which not to mention always “higher payouts than anyone else”. Secondly, advertising networks keep seeing gross clicks and impressions increase as the web is used more and more. So, advertisers will have cheaper rates and the publishers will make more and more money. In other words, the mentalitly of the affiliate and advertising networks is that people will continue to go where the money is. That’s definitly not a sound long term business strategy.

So, the question is which people are setting the right example and more importantly, are setting themselves up for strong business in the future? Most certainly Advaliant/MediaTrust, Motive Interactive, and Wes Mahler/Prosper202. Both Advaliant and Motive posses the leading affiliate interfaces that will soon posses algorithims to match offers with an affiliates past history promoting other offers, and maximize the relationship between affiliates and advertisers. Wes Mahler is worthy of being thanked by every single successful affiliate today, thanks to his opensource PPC tracking system Prosper202.

On the flip side, the companies that are lacking in the innovation department (among others): MaxBounty, and almost all networks using DirectTrack. Take a look at MaxBounty’s homepage, when I applied at first I thought  I was in the wrong site. Their site is straight out of the dot com bust. Seriously, would you feel safe putting your PPC budget into very technology developed 9 years ago?  Remeber that’s like 100 internet years. To the networks using the DirectTrack interface, great, you are making lots of money. However, DirectTrack serverly limits the amount of customization in the affiliate interface. Not good when it comes to 2010 and several other netowrks have more powerful tracking sytems and limitless opportunities to help out affiliates even more. Props to Ads4Dough for initiating their own switch over to their own custom tracking platform.

So, to the affiliate networks out there, take the hint, you will be ahead of the competition down the road if you invest now. As for the advertising networks, first make an effort to be friendly with some of your biggest spenders, then innovate. Watchout in the coming months for industry leading changes by Advaliant. They are brewing up some pretty neat features for affiliates, not seen anywhere else.