Yoni Baciu, one of YieldBuild’s engineers, has overlaid imprints of 20,000 ads randomly selected from the Web’s top 100,000 Websites (by traffic) on one blank slate. The result is YieldBuild Lab’s Heat Map which renders the most popularly-selected positions on a Web page with a brighter red glow.

What does the Heat Map tell us?

First, header position ads, and sidebar ads (particularly on the right side), are popular, and ad density also decreases as you go down the page. The darkest portions of the Heat Map are to lower-left.

This is not to say that this a protocol for placing ads if you want to maximize performance. Generally, ads should be within a users’ line of sight, close to navigation elements, and embedded in read content. But site-specific recommendations are usually the result of careful testing (or implementation of YieldBuild, which finds the best-performing regions for each page algorithmically).

Interesting, Google’s own recommendations for AdSense publishers suggest heavier weighting towards the top of content (although not necessarily the header) and also favoring the left more than the right.

If Google’s recommendations for AdSense publishers prove to be generally true for publishers using other networks as well, then that darker-red zone to the middle-left probably presents some opportunity to increase revenue, although without YieldBuild or testing, there’s no way for a publisher to know.

Master New Media’s Robin Good spoke with YieldBuild CEO Paul Edmondson recently, and posted the video of his interview with Paul Edmondson on his site. They cover what YieldBuild is, how it benefits publishers in terms of its ease of use and performance, why ad optimization like this matters, and how YieldBuild compares to Pubmatic and the Rubicon Project.

For a full transcript, see Robin’s post.

Both of the conventions are over, and the US electorate has only two more months of campaign misery to endure. Television commercial spots attacking Obama and McCain will saturate the airwaves from now until early November. Those who’ve gotten sick of it all could turn to the Web, but even that is no longer necessarily a safe haven from partisan mudslinging. The election which has embraced online social networking has also been a boon to contextual advertising, particularly Google.

Here are some interesting figures on the campaigns’ spending and performance on online advertising:

• The majority of Obama’s online ad spend—59%, or $3 million—from January through July of this year, was spent on Google ads. Yahoo followed with $618K, and local advertiser Centro a bit more than half a million dollars. [ClickZ]
• ComScore data shows that for the first half of this year, the Obama campaign paid for 12 times as many display ads as the McCain campaign. [MarketWatch]
• Nielsen Online data points to heavier spending by the McCain campaign on search advertising compared to the Obama campaign. June saw 7 million search ad impressions from McCain, and 1.15 million from Obama. [National Journal] The gap widened in July, when McCain paid for 15.1 million search ad impressions, while Obama barely budged at 1.2 million. [WSJ]
• ‘Typo-squatted’ domains (like barckobama.com or johnmcain.com) are squirreling away online spend. A Symantec study showed that 47 of the 160 misspelled variants of Obama’s site were held by typo-squatters. [AFP].

Naturally, advertising is only one part of the candidates’ presences online, but growing spend demonstrates both its effectiveness and the growing traffic directed at the two candidates.

LiveRail, the video ad platform, has released its most recent snapshot of the state of online video advertising. On a decidedly small base—$371 million in 2007—online video advertising has grown along with the recent explosive growth of online television, even as monetization of user-generated video makes sputtering attempts to catch up.

Some interesting stats from this report:

• Although online video advertising growth is slowing, it’s still at a healthy double-digit tick: a projected 67% in 2008 vs 73% in 2007
• As a share of total online ad spend, video is still small, but growing: 1.75% (2007), 2.36% (2008), increasing to a projected 3.86% by 2010, when spend will clear $1.4 billion
• In-stream advertising (pre-/mid-/post-roll) constitutes 88% of online advertising
• Only 21% of online video streams are being monetized
• The estimated eCPM value of all 153 billion video streams projected for 2008 in the US is $4.05. Monetized video streams will have achieved an average eCPM of $19.33.

The study also points to marginally better monetization of overlay ads (like those used in YouTube, for instance) over in-stream ads ($18.40 vs $15.80; 16% better).

Why are only 1 in 5 streamed videos monetized at all? The report points to the fact that YouTube, easily the largest video streamer online, monetizes a scant 3% of its inventory. Advertiser interest in spending on UGC is low, and lowest for UGV (as a Collective Media study showed: ad performance on social network sites).

Interestingly, the heavily-promoted 2008 Olympics video stream generated less than $6 million for NBC, a drop in the $1 billion bucket the network is estimated to have generated through advertising. Why? A suspected reluctance to NBC to promote its video stream for fear of cannibalization of television viewership, and its usage of Microsoft Silverlight, not Adobe Flash, as its video delivery platform.

Full report.

The Wall Street Journal just published an article on the growing spread between search (predominantly text) advertising, and display advertising, as the economic downturn begins to hit marketing budgets. Although advertisers, continuing to follow eyeballs online, have been pouring in money into online advertising, recent statistics from eMarketer suggest search advertising is reaping the largest bounty.

Here are some interesting statistics from the eMarketer report, referred to in the WSJ article:

• search advertising is projected to total $10.4 billion in 2008, double that of display advertising ($5.2 billion)
• in 2007, the figures were $8.6 billion for search ads, and $4.5 billion for display ads
• search ads will comprise 42% of the total online ad market for 2008 (it was 40% in 2007)
• display ads will comprise 21% (the same as last year)
• the overall online ad market is growing healthily, with a 16% increase to $24.8 billion in 2008 over 2007 ($21.4 billion)
• Google dominates the search ad market, with more that 70% market share

The growing gap between search and display ads reflects a sensitivity towards performance, over visibility and branding benefits. Search ads are paid for on a per-click basis (CPC) typically, while display ads are typically charged on a per-impression (CPM) basis.

What display ad networks might consider to respond to the direction of the market is to allow pricing on a CPC or CPA basis, to allay fears that online advertising spend might not demonstrate tangible response figures. Not long ago, site/placement-targeted Google ads had to be purchased on a CPM basis; recently advertisers were given the option to make the same sorts of placements on a CPC basis. Other ad networks that look at Google’s growth with a touch of envy might do well do copy some of their moves.

Valleywag recently reported that YouTube is opening up sponsorship of its front page to large-format ads (we’re talking 600×300 “mega-banners”). Although most of the article focused on YouTube’s use of innovative formats to help monetize its enormous traffic (something it hasn’t really figured out yet), the big story here is that large-format, exceptionally high-quality ads are being favored by ad agencies for one reason: they create a high-quality user experience (and engagement metrics prove it).

An example: the 300×600 ad format; an official IAB ad unit, appropriately named a “half page ad.” Its width alone makes it far more appropriate for broadsheet-style news sites—much more of a comfort zone for ad agencies—than blogs. It also replicates the ad size we see in magazines. High-volume advertisers like AOL and MSN are promoting them as part of their portfolio. Why? Larger ads perform better, from both a CTR and conversion standpoint.

Brand advertisers are willing to spend, provided the context (the site) and the creative match and build their brand equity. As more and more of them move their spend online, to follow the traffic, from offline sources, big opportunities will develop for creative developers who can develop extremely high-quality, and large, ads, and sites that can accommodate them. Crisp, smooth video, and high-res, large creatives with the real estate necessary to convey a message, will score major wins. In short, online ads that replicate the ads we’ve gotten used to on primetime television and high-quality magazines will earn publishers excellent CPMs.

Here are some examples of creative, high-quality interactive video-enabled ads. Given the premium paid for novelty and quality, we should expect to see more of these:

• BC Hydro (pull the light switch)
• HSBC
• Emirates Airlines (click on the Jazz sign)
• Wags Boutique

Google AdSense is a fairly easy advertising solution for small-to-large publishers to use. However, questions always come up, and it’s nice to exchange information and experiences with others who also earn via Google’s contextual advertising network. There are a few options as far as Google AdSense forums go:

• Google Groups - AdSense Help: This official forum helps AdSense publishers keep up to date with program and product changes, and share issues and problems for solutions from the community and Google employees (known as  ”AdSensePros”, easily identifiable by a blue-boxed G next to their name). There are sections for AdSense Setup, Implementation, Troubleshooting, Earnings & Payment questions, and Feedback to the AdSense team for future upgrades. A Google account gets you in.
• Digital Point’s Google AdSense Forum: This enormously popular forum has existed for almost as long as the AdSense program has, and enjoys a flood of daily traffic and use. New publishers can ask the community for help with compliance (for example: what content types violate the TOS?), placement and layout (including submitting your site for advice from the community), reporting and statistics (and how to make sense of them), and payments (when to expect them, and what to do if they don’t come in).
• WebMasterWorld’s Google AdSense Forum: Requires payment for the ability to post, but passive reading is still free. WMW is the place for publishers to discuss search engine traffic, Google updates, and other matters important to those earning a living from online advertising. The AdSense forum, while not as heavily used as the DP forum, still enjoys steady activity and substantial crossover from users who are pros at SEO and understanding the relationship between content, traffic, and earnings.
• Joel Comm’s AdSenseChat: This site is a favorite among affiliate marketers who might be running AdSense on their remnant inventory and still want to make that perform well for them. AdSense optimization is a favorite topic; users touting milestone earnings and substantial improvements abound, along with the tricks that made them happen. The second most popular forum section is the “critique my site,” which invites users to offer suggestions on layout and placement for revenue maximization (naturally, YieldBuild would be the right answer for all but those who like to do manual experimentation).

There are several other forums on sites dedicated to discussion on AdSense, but they typically don’t have the critical mass of users to make participation with them worthwhile (some examples include Search Engine Watch’s, Webmaster Talk’s, etc.).

Three months ago, I blogged on Google’s Ad Manager, which allows websites to manage their own direct sales and remnant ad inventories (with the latter, presumably, filled primarily by Google’s AdSense). At the time, the service was limited to a small pool of clients. Google has now announced that Google Ad Manager is open to all AdSense account holders—although it does mention that you do not have to run AdSense on your sites to use its service.

Google’s product helps sites that have their own direct sales team manage inventory and creative, and it provides a convenient, popular back-fill option with AdSense. The publisher first starts by specifying ad spots (similar to YieldBuild ad zones) that can be filled with ads. It then uploads any direct-sold creative, and any impression or click caps associated with each creative. Finally, it asks the publisher to specify what it wants done with remnant inventory (ad spot impressions that can’t be sold via direct-sold ads)—AdSense and other participating networks can be used to make sure ad spots don’t go unfilled. There is some basic optimization, as well; Google can decide whether a remnant ad can outperform a direct-sold ad, and serve it instead.

Why is this useful? The chief benefit to site owners who choose to use Google’s product will be the reduction of mucking around with code. Ad tags are generated once and installed on a site template once; the rest of creative and inventory management is done through the Ad Manager console. Google also touts the savings from not having to host your own ad server; Google provides the hosting for the ad server and creatives.

What does this all mean? Google’s clearly looking to dislodge ad serving solutions like OpenX (formerly OpenAds), which provide a similar set of services through an installable program running off an ad server. Google’s solution offers the same benefit its many other products (Google Apps, Gmail, etc) have over their competitors—the cloud—although OpenX has developed a hosted version of its product, too. It will also, ideally, assemble some popular ad networks in order to optimize against something other than just AdSense (although DoubleClick, a Google ad network, is sure to figure prominently in the mix as well).

When you toss around terms like “ad networks”, “yield optimization”, and “reporting”, the new Ad Manager can sound similar to YieldBuild, which is an ad network management and format optimization service. Ad Manager, however, does not address format optimization (algorithmically determining the optimal background colors, border styles, positions, sizes, and formats for ad layouts on a page) that YieldBuild does. And, due to competitive interests, there are likely to be some ad networks that will resist working with Google, that a network-agnostic (and network-unaffiliated) service like YieldBuild, in rounding out the ad network management picture.

Rather, Ad Manager seems to be fleshing out an important part of the online advertising long tail, so well that Google will likely dominate online ad distribution.

For the smallest publishers, AdSense is the only viable option since they don’t have minimum volume requirements. In order to launch to the next level where vertical ad networks and direct sales are possible is around the 300,000 PV/month point, where the added layer of management that Ad Manager offers makes sense. Doubleclick delivers for high-volume publishers, 50+ million monthly PVs. With Ad Manager, Google is able to serve the middle ground, at least partially.

Although this blog has earned plaudits for covering contextual advertising, popular networks like AdSense and YPN, and developments in online advertising, we are not, by any means, the only enthusiastic bloggers in our space. There are a number of blogs whose RSS feeds I’ve added to my reader, and discussion forums dedicated to AdSense and contextual advertising that I refer to.

Here are some blogs on AdSense and contextual advertising:

• YieldBuild Blog - the contextual advertising blog, typically with several posts per week on performance tips, optimization advice, discussion of studies and news relevant to online publishers.
• Inside AdSense - the official blog for Google AdSense. Includes a mixture of advice for publishers, and announcements about changes in AdSense service.
• YPN Blog - the official blog for Yahoo Publisher Network. Similar to Inside AdSense, the YPN Blog offers details advice and insights to publishers, as well as posting announcements and information about other Yahoo service integration.
• JenSense - Jennifer Slegg is a contextual advertising consultant, and maintains this blog to share her insights on how to make more money from AdSense and other popular contextual advertising networks.
• Optimizing AdSense - Danny Gabriner, contextual advertising optimizer for CNET, maintains this blog full of useful advice and insights on how bloggers and site owners can make Google AdSense perform better.

In addition, there are a few forums that have active discussions on AdSense:

• WebmasterWorld Google AdSense forum - information exchange, announcements and reactions, and even rants and flame wars (hey, this is a discussion forum!)
• AdSense Chat - Joel Comm’s vB forum on everything AdSense. Includes discussion on all matters related to AdSense, including a critiquing “workshop” and help from the community for newbies
• Digital Forum’s AdSense Forum - another active forum, mostly questions and answers by the community

What contextual advertising is, a description of the most popular networks, and how it compares to more traditional forms of Internet advertising.

Contextual advertising uses the topical context of a page in order to match the most appropriate ads to serve onto a page. A contextual advertising network will spider a page, gathering information about what the topic of the page is, and then serve up ads that match that same context. A page on how to groom your pet, for example, might serve up contextual ads on dog grooming supplies, while another page on the same site on makeup application tips, might serve up ads on beauty supplies or beautician schools.

How does it work? The contextual ad service sends a page crawler (a “spider”) to scan each page and determine what it’s about, usually by the prevalence and density of keywords in the page (although companies touting technologies that determine “word shape” and semantics promise more accurate, relevant matching). Then, the topic of the page is matched up against existing advertiser inventory with a high degree of contextual relevance to the page, and the ad is served on the page.

What are your contextual advertising options?

Google AdSense is, by far, the largest contextual ad network. Its enormous and highly diversified pool of advertisers ensures both breadth of coverage and relatively high bids (and payouts to publishers). However, both Yahoo and Microsoft have contextual advertising networks that are making headway into Google’s publisher base; in fact, in many instances YPN outperforms AdSense.

Here is a list of popular contextual advertising networks:

• Google AdSense
• Yahoo Publisher Network (YPN)
• Vibrant Media
• Kontera
• LookSmart
• Chitika
• Proximic
• Peer39

You can read more information on the first six contextual ad networks and the final two semantic ad networks.

How does contextual advertising shape up against display/banner advertising

On high-traffic niche or brand sites and blogs, premium ad inventory is typically served through a vertically-oriented ad network, which is subject to caps or placement requirements, while remnant inventory is filled using contextual ad networks such as Google AdSense or YPN. This is due to the fact that blogs typically source a great deal of their traffic from regular readers, who can be profiled demographically and geographically in order to pair with niche ad networks. (Our list of the most popular blog ad networks)

However, on topically-diverse content sites such as HubPages or About.com, contextual ad networks dominate, since the majority of traffic is sourced through search engines and the only thing binding visitors is their interest in the topic of the page.

In terms of earning: both types of ad networks vary in the ranges of CPMs they can deliver to publishers.

• For niche, premium blog ad networks, for example, $5-30 CPMs are not uncommon, while premium publishers (such as newspapers, A-list bloggers) can command CPMs closer to $100. Blogs not accepted into more exclusive ad networks can expect to earn in the $1-5 CPM range for display/banner ads.
• For contextual ad networks, the topic and quality of traffic are the biggest modifiers of CPM. Finance, business and legal topics tend to earn more, while entertainment, celebrities and photos tend to earn the least. Traffic sourced from search engines tends to earn the most, since visitors are keenly interested in searching, while regular, routine visitors tend to be the worst-clicking bunch. All said, CPMs can range, on a site like HubPages, from $0.50 to $50.