Goodbye FAN

I never mentioned this, but about a week ago I signed Liquid Designs up with the FeedBurner Advertising Network (FAN). I was excited about the prospect of being accepted and I figured that with a network as big as FeedBurner (and over 1300 subscribers to my feed at the time) that this would be a decent way of making money. I was accepted into the program after a short wait and things seemed ideal. The ads looked like plain text ads (I’m fooled easily) and apparently took no work on my part, being that FeedBurner took care of splicing them into my feed.

Over the course of the past week I had five campaigns offered to my feed, four of which I approved. I discovered they were all images after I saw a very bright banner early on, and I realized they were quite loud. For a feed that usually features no more than a 240×140 pixel thumbnail most of the time, I realized that these ads were larger than my entries! Not that this was a concern, but it was really ironic.

I also noticed that the ads weren’t always appearing in my feed. At first I didn’t pay much attention to this, but today when I was testing some feedreaders, I noticed that none were displaying my ads. None at all! I dug through the FeedBurner support forums for an answer to this issue, and I found out that Feedburner ads are distributed across various sites based on demand. Once an advertiser has received the number of displays for the month, their ad won’t show up again until the next month. That’s what a “campaign” is, and that explains why ads are not tied to entries, but rather loaded fresh every time a feed is viewed. Not exactly what I was expecting.

What bothered me more, however, was that these ads were priced based on impressions and click-throughs, and the CPM was not very high. Let me tell you something about Internet advertising: I absolutely hate CPM/CPC. I hate those schemes with a passion. That’s how Adsense and most every other ad program operate, and I avoid them. For one thing, with CPM/CPC, you can have ads on your site for a whole year and make next to nothing. This is due to the fact that you don’t get paid for displaying the advertisements unless your users click on them. For some websites, driving traffic to advertisements is easy… for tech-related websites, it’s not. Plus, it’s completely out of your control whether an ad is decent or not. At least with FAN, you can decline campaigns you don’t like, but you still can’t predict how many clicks an ad will get. If your users just happen to be a tough crowd, you get nothing for all the legwork you put into monetizing your site. Plus, you don’t make money from users who see the ad on your site, decide not to click on it, but remember the site and visit it another day. That’s called influence and CPM/CPC doesn’t count it.

It’s not just about publishers though. CPM/CPC is misleading to advertisers… it may prevent them from wasting money on impressions (ad views) that don’t bait users, but a click-through doesn’t guarantee that a sale will be made. It’s entirely possible that users will click on ads just to support the publishers, or that they will click-through and be dissatisfied, or even that publishers might create fraudulent clicks. Any way you look at it, advertisers are always paying more than they should with CPM/CPC schemes… it may not be a lot, but it counts.

I always avoid CPM/CPC schemes with my sites because I know tech sites are very difficult to monetize that way. Most of the users who visit my websites block ads with their browsers or have trained themselves to ignore ads when they see them. There’s no reason to assume that feed-based CPM/CPC advertising will be any more effective than it is in the website; when I realized this, I dropped out of FAN immediately.

I’m not bashing FAN… I imagine some websites (TechCrunch for example) must be making a decent amount of profit from it. I’m just saying it doesn’t work for me, just like any other CPM/CPC scheme.

So what do I prefer?

On the advertiser side of things, I think the best scheme (for advertisers that are looking to make direct sales through their websites) would be affiliate programs. Affiliate programs are easy for publishers to optimize for, and they usually pay well (since the value is based on what the advertiser makes per sale, not on some statistical comparison of clicks to sales). For the advertisers, they almost never waste their money… they pay when a sale is made, meaning they pay when they get paid. It’s a win-win situations.

On the publisher side of things, I think the best scheme is CPI. This usually means that the advertiser pays a flat rate for a certain length of time, the cost being based on the specifics of the publisher’s website/feed (traffic, placement on page, etc). CPI usually means the advertiser has a relationship with the publisher; they know where their ads are. Plus, it’s very hard for publishers to game the system, since the only way for them to improve their earnings is to improve their sites… fraudulent clicks are not an issue. For the publisher, it means that they always make money, and they can even estimate their earnings at the beginning of the month (rather than sitting around all month hoping for clicks). With website-based advertising, I have earned far more with CPI than I ever did with CPM/CPC, and CPI has actually been easier to work with, since I haven’t had to make any predictions about my users’ behavior.

For these reasons, I stick with affiliate programs and CPI schemes. If FeedBurner offered something like this, I would sign up, but as long as FAN is CPM/CPC based, I’m out. In case you are wondering, I’ve signed up today with Text-Link-Ads Feedvertising for Liquid Designs. They are a lot cleaner (basic text links as opposed to images), they are integrated into my posts (by way of a server-side script rather than FeedBurner-style splicing), and hopefully they will be more profitable. We’ll see.

Update 10/11: Here is an interesting article from SiteProNews that covers some of the same problems with CPC in the Adwords arena and peddles a CPI scheme at the same time: Going Broke on Google Adwords?