Here are our tips and tricks to running your own AdSense optimization. This is a mixture of methods, rules of thumbs, and suggestions from us for this very complex process. If you really want to extract all possible value from your AdSense ads, we naturally suggest you try out YieldBuild — it executes an extremely complex set of optimization tests algorithmically (also since a group of good layouts tends to outperform one great layout, and because optimization is an ongoing process) But if you’d like to do it manually, here’s what we suggest:

1. Review our advice on AdSense Formats and AdSense Placement

Take a look at our suggestions on AdSense formats and formatting (choosing your ad units and how to choose colors and styles) and AdSense placement (setting your layout and positioning).

These will give you solid rules of thumb. However, remember there are always exceptions:

We know of one site, for instance, that has a blue-and-white background, where a bright green ad performs best above the fold, totally against the rule of thumb that suggests blending your above-the-fold ads into your background, or choosing subtle hue variations.

Another rule that is often broken is one of ad unit size. We suggest going with the 3 most popular ad unit sizes. However, if you’re on Blogger, for instance, the 728×90 ad size is not supported. You’ll have to go with 468×60 or 234×60. Similar deviations from the three most popular might have to be made for your site, based on your platform or template design.

So, use our suggestions, but try a wildcard option based on your intuition, to see if a deviation might actually perform better.

2. Pick a testing protocol

This can go from very simple (with likely less-impressive results) to more complex (with better results).

A very simple protocol might involve:

• choosing a very small sample of color/format variations, based on our rules of thumb, your intuition, and maybe one wildcard that you’d like to test (like a bright, constrasting set of colors)
• similarly, choosing a small set of layouts
• ignoring time of day effects (i.e. assuming traffic at different times of day perform the same)
• ignoring traffic source (i.e. assuming that visitors from any source, whether they’re loyal users or one-time visitors, behave the same)
• assuming no changes in your traffic month-to-month

Pick a certain time interval for each test phase that you feel would give you enough useful data, at week-long increments (less than one week increments are not recommended, since, as you probably know, traffic varies quite a bit over the course of a week).

Set up a reasonable set of permutations on format and layout (for instance: Color1 x Layout1, Color2 x Layout1, Color1 x Layout3, etc).

Try each variation of formats and layouts for each time interval, recording as much performance data as you can, but especially focusing on CTR (click-through rate). Assuming no significant variation among advertisers targeting your site or its content, and no substantial fluctuations in traffic, you should have some degree of information about which format/layout permutations work best from among those you tested.

For a more complex protocol, but that provides greater accuracy in your results (because it doesn’t assume traffic or advertiser activity stay the same, week after week), we suggest sequential A-B testing. In this case, two layouts with their corresponding tested formats “face off” against each other, automatically switching each page impression from one layout to the other, in order to capture 50% of impressions with one layout (“A”) and 50% of impressions with “B”. Here are some protocols you’ll want to check out:

• Google’s advice on A-B testing AdSense (uses Google-sanctioned Javascript code for switching; you’ll have to set up AdSense channels to track relative performance)
• Performancing’s PHP-based A-B testing script (also note the first comment’s link to a downloadable PHP script)
• Webmaster Tutorials PHP-based A-B testing script (great explanation and PHP script)
• ClickZ’s A-B Testing for the Mathematically Disinclined (a good backgrounder on how A-B tests work, and how to ensure the proper sample size)

Two more; hat-tip to Danny Gabriner:

• SplitTester allows you to enter two ads’ clicks and CTRs and it will make a determination of the long-term performance; this is useful if you have a relatively low-traffic site and don’t want to wait until you reach statistical significance.
• Blazonry: AdSense testing PHP script

For a higher level of optimization rigor, you can invest a little time to design a Taguchi Multivariate Testing (MVT) or Design of Experiments (DOE/DOX) protocol that will allow you to specify the parameters, their ranges, and optimum outcomes. It will, in turn, generate the precise format/layout combinations for testing. What we haven’t been able to find, so far, are any scripts that Web publishers can use to run this sort of test on their own Web server.

3. Test, record, repeat

Apply your protocol, set up custom AdSense channels, determine the permutations that perform better, and…repeat.

Repetition is necessary for a few reasons:

1. Traffic patterns can change. Fluctuations in the source of your site’s traffic can have an impact on how your audience responds to ads. Traffic changes can include changes in source sites, visitor geographies, and peak browsing time patterns.
2. Advertiser patterns can change. Site-targeting advertisers can add or drop you, and there can be drifts in pricing or in campaigns for the keywords that your site targets.
3. Ad blindness can set in. Especially if you have a site with a large number of repeat visitors, your readership can learn to ignore ads that don’t change position and color. Rotating among different ad formats and layouts, and occasionally jostling the formats with something new and even jarring, can help stave off viewers’ subconscious ability to ignore your ads.

Although we think this is both extremely complicated and extremely valuable (which is exactly why we designed YieldBuild), we know that some publishers like to take control over this process and reap substantial benefits to their AdSense revenue. For others that want the same (and better) performance without the time and hassle, we’d be happy to welcome you to our service.

Many thanks to Chris Gathright for contributing to this article.

After setting an aggressive agenda for 2008 to monetize YouTube’s massive traffic, Google has made a surprising announcement: they will let publishers sell their own ads.

While at first glance this seems like a move made out of frustration from their own lack of success (estimates run from $90-200 million in revenue for 2008; keep in mind they spent $1.65 billion for the site in late 2006), it is probably strategic on a few levels:

• it provides publishers a reason to stick with YouTube, or at least syndicate their video content through the site
• it grants Google access to a wide swathe of publishers interested in online video advertising who are often bypassing networks in favor of direct deals with publishers
• it dovetails nicely with Google’s previous third-party ad network support announcement, signalling another popular content format that it wants to dominate ad delivery for

As noted on Friday, user-generated video is one of the trickiest Web 2.0 formats to attract advertiser support. Since YouTube has continued to face an onslaught of lawsuits for not enforcing IP claims, advertisers might be wary that the service will do any better at meeting advertisers’ content standards.

Advertising on video might very well be something that needs to be built from the ground up.

Collective Media has released the results of a survey on advertisers’ attitudes towards social network sites’ advertising prospects, and DoubleClick/Performics’ study of the level of credibility web users have towards advertising across different site types, point to some interesting developments among advertisers and visitors alike to social media advertising.

First, advertisers continue to be wary of spending on social media, but there are wide variances with respect to type. Compared to the 86.6% that would feel comfortable advertising on a news site:

• 73.2% would advertise on a social networking site like Facebook or MySpace
• 61.1% would advertise on blogs
• 27.4% would advertise on a user-generated video site like YouTube

The chief fear, naturally, is the relative inability of these sites to completely monitor their content and prevent embarrassing associations with their brands (although a company that I saw present at Under the Radar earlier this week, Keibi, hopes to make the moderation process easier); there’s a perception that only “cutting-edge” advertisers can take on the risk of advertising on social media.

Interestingly, site visitors themselves are least likely to trust social media ads. Only 1% of respondents to the Performics study said that ads on social media sites and blogs would influence their buying behavior. The highest trust (10-18% across age groups) was found on company Websites that integrated reviews from customers.

Why? It’s partially a chicken-and-egg problem. If mainstream advertisers stay away from social media, those who do capitalize on it tend to be a bit “edgier” — my personal association with MySpace advertising involves racy dating sites. This can create a poor overall user experience and strengthen a negative perception in visitors’ minds.

That said, there are opportunities for advertisers who want to exert a greater degree of control over the context in which their brand is displayed by using some emerging technologies:

• viral widgets/gadgets: companies like SocialMedia Networks help advertisers create widgets and user-interactive pages for companies like BMW
• product placement: companies like Shift Control create online games that feature placements from clients like Coca Cola
• behavioral targeting: Facebook has begun to work on this, and companies like Revenue Science can deliver targeted ads to visitors based on site and across-site behavior

With technology should come greater control for matching advertiser to eyeball, without ruining user experience. Advertisers, though, will probably eventually come around as more and more traffic moves towards social media anyway; those advertisers that indulge in a little handholding might reap the benefits of the increased business.

Robb Webb (robwebb2k.com) reports that Facebook has just added an interesting feature to ads on their site: the ability to give feedback.

In addition to allowing users to scroll through different ads, now users can give a thumbs-up or thumbs-down Digg-like rating to ads. These kinds of clicks prompt a pop-up with a drop-down with possible reasons a user might like an ad (“Good Offer”, “Relevant to Me”, “Interesting”) or dislike it (including TOS-violations like “Pornographic” and more subjective feedback like “Repetitive”)

This is similar in some ways to Seth Godin’s SquidOffers (currently discontinued), which allowed advertisers to crowdsource advertising offer messages considered attractive by the Squidoo community.

But likely there are 3 motives at work here:

1. encourage the community to police ads that might not be compliant with Facebook’s TOS, or offputting to users
2. build in some sort of quality score, similar to Google AdWords’s, by incorporating user feedback into the pricing/ranking for advertisers and ads
3. give incentive and train users to pay attention to ads–if they feel like they have a say in what appears there and believe ads will be targeted to their interests and tastes, they might not learn to ignore them

Given the outcry against Beacon late last year, Facebook has to tread carefully with its advertising in order to not destroy the high-quality user experience that have been key to the site’s success. Giving users the sense that they have greater control over the ad messaging they’re seeing might reverse the perception created the last time “Facebook ads” came up in the news.

Also discussed at allfacebook (including Facebook’s official statement) and WinExtra.

Continuing our series on advice on how to optimize your AdSense ad units, we’re going over AdSense placement techniques in this blog post (last week I covered AdSense formatting).

Rule #1: Put your ads above the fold

What this means is that your ads should be visible when you first load your page, before the visitor needs to scroll downward. Although ads below the fold can perform well, it’s a trickier proposition and requires testing to get it right –the footer spot, in particular, is among the hardest to monetize, and usually requires constant changes to the format in order to perform consistently (that’s what YieldBuild tends to do for our clients’ sites).

As I mentioned in the AdSense formatting post, be sure to pick the three most popular AdSense sizes: the 300×250, the 160×600 and the 728×90. More and more publishers are organizing their templates to accommodate these 3 sizes. In organizing your template layout, keep in mind….

Rule #2: The L

Ad units that adjoin each other tend to do well, in a format called “the L”. They should run perpendicular to each other and sit very closely to each other, as they do in these examples:

Rule #3: Ads should be close to click activity

Look at the places on your page where users click, where they interact with your site: navigation; share buttons; next page; etc. Place ad units near them. Don’t make your visitors have to drag their eyes and mice to regions of your page where they wouldn’t go normally, to look at ads…because they won’t.

Rule #4: Embed ads in content

This is relatively easy to do with the popular and versatile 300×250 ad unit. Embed this unit to the right or left of your content. And, blend the ad unit with the page background when it’s above the fold, and use highly-contrasting colors against your background for units below the fold.

Rule #5: Make your ad unit layout match your template

This might go without saying, but the precise placement of your AdSense ad units should make for a clean look on your site. Visually jarring ads or ones that don’t blend in aesthetically with your site with respect to their placement will often not perform well (although there are exceptions, but you would need YieldBuild or testing to find those out).

Many thanks to Chris Gathright for contributing to this article.

MediaWeek reports that Turner Broadcasting is getting rid of third-party ad networks for its remnant inventory across 19 entertainment-themed Websites (including CNN.com, TBS.com and CartoonNetwork.com). Reason? Why sell out their own inventory at a discount, when they already have direct relationships with advertisers?

You can’t fault them for it, and we imagine that as both advertisers and publishers become more confident about their ability to deliver the necessary volume, we’ll see major publishers who have an established offline presence and relationship with advertisers take complete control over their properties’ advertising. Silicon Alley Insider notes that both the WeatherChannel & ESPN have made similar intimations as Turner’s sales chief, David Levy.

Note that these announcements relate to display and video ads, not contextual ads generally served up by the likes of Google, Yahoo and others. For the latter, contextual matching and advertiser breadth still provides contextual ad networks with sizeable advantages over in-house advertising teams. But the former target branding and awareness over direct marketing, something broadcast media is well-positioned through its intense understanding of the market to deliver on.