Friday, December 28, 2007

Gaming Project Wonderful: Fewer Ads, Bidding Nothing Makes You More Money

When Project Wonderful first came out and approached the webcomic communities, people thought the new "Infinite Auction" model would revolutionize advertising as we know it. Finally, everyone thought, people would get paid what they were worth! Of course, nobody realized what "they were worth" actually meant.

Make no mistake, Project Wonderful is a clever system, and it's certainly more entertaining (and easier) to become an advertiser on there than ever before. The problem is that (like most advertising media), Project Wonderful is working in the Advertiser's favor, so it's up to the publishers to do everything they can to make sure their properties make as much as they can. Fortunately, it's easy to be both, and there's only a few things that need to be done to get the best results possible, to beat Project Wonderful:
  1. Comb the Freebies. Sometimes bids go for $0.00 (as in absolutely free), and believe it or not, these things will allow you to use completely free advertising. By bidding on these, you force paying customers to pony up (which does at least a little good for the people offering the space, as even 1 cent of profit is better than making absolutely nothing), and/or you get some free airtime, which drives new traffic to the site and improves your own statistics (see below). Remember, you can only make a zero bid for two days at a time, and even if someone else already had a $0 bid on the slot, that just means that you can either force them to pay, or you'll get the spot once their two days runs out.

    The best way to do this is to use Firefox to access PW, search for a specific size ad, and target the ads with a $0.00 current bid and no minimum; then open up a huge number of tabs to bid on those zero-spaces once you've pulled out a good number to bid on. At least 25% of those will likely result in immediate high bids. Even if they're on lousy sites, it's exposure nontheless, and it's also an easy way to test out similar ads against each other (which allows you to E.A.T. on your ads prior to actually laying out some cash!)

  2. Don't Be Picky. Waiting for a publisher to accept your ad is a drag, and likewise, you're missing out on money from each and every ad you do accept, because you get credited every 30 minutes! Even if you like one ad over another, keep in mind that everyone else's bids drive up the price of the one getting the top slot right now, so being picky is in nobody's best interest.

    Why? Because EVERY BID BUILDS ON THE OTHERS. Here's a quick demonstration of a typical bidding scenario on a single ad space:

    • Bidder A is willing to pay $1 on the space, but nobody else wants it. Even though A could pay, it is an unconstested bid, so A gets the slot for free, and the publisher gets no money even though A is willing to pay $1.
    • Bidder B comes along with a $0.00 bid, since he's looking for free advertising. Suddenly there are more bidders than spaces available, so bidding begins to come into play. Even though B is freeloading, it's still an active bid, and so A is finally forced to pay (it's only a cent, sure, but that's better than nothing!).
    • Bidder C comes along and bids $0.05. Now A has to pay $0.06 in order to keep C from claiming the space.

    In other words, the only way you get A to actually pay $1 is if someone bids up to $0.90 on the same slot at the same time. This is great for advertisers because it ensures they never pay more than they want to, but the only way publishers (i.e. you) get to see these huge returns is if a bidding war actually starts. Also, it means you shouldn't discourage smaller bidders, because their presence forces bidding wars and gets higher-paying advertisers to shell out more money. Bidders will often pull out when they realize they're being outbid, which is a pain in the ass in and of itself when you're counting on certain bidders to keep your prices high, so don't help the process along unless there's something REALLY wrong with a higher-rated ad than you're comfortable with.

    The best way to encourage bidding wars is to keep the number of ads available at any given time down to begin with, and that means showing the largest ads you can for a given space. Larger ads pay better (Note how the Skyscraper ad on the blog tends to outperform the banner ads on Last Resort's front page, even though the blog receives only a fraction of the traffic), and the more spaces you have, the more people you need to even be interested in advertising there to make a single cent (once again, the ads only start paying off when you have more bidders than available slots!).

  3. Expect Logarithmic Returns on Traffic. Put bluntly, there are a lot of sites with very little traffic, and very few sites that get a lot of traffic. As you accrue more traffic, you should receive exponentially higher bids for that traffic because you are now competing with fewer and fewer sites that have the same level of traffic.

    This gets back to the initial problem again of furthering your exposure, but it also means that when you start to see an improvement in ads, it also means you're getting more/better traffic as well.
Keep in mind that Project Wonderful should not be your only source of income; while more consistent than donations, it can be incredibly hard to see worthwhile returns when starting out. The good news is that Project Wonderful can run alongside Google Adsense (Google's restrictions apply only to content-based ads; Project Wonderful doesn't care about content!) , and it can provide a new set of statistics for you to keep track of, giving you a better sense of where to put your ads (and also how to further improve your advertising gain!)

And when you realize how easy that can be, it's just wonderful.

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