My Analysis of Pixel Ads
Last September, when this site had about three renegade visitors per day (two were probably robots), I paid people $1.00 to place a 40×40 ad on my site. In about four weeks I had all $13 spent after placing 16 ads. Thirteen dollars because because three guys declined the payment. That got me my first ever mention on Jeffrey’s Personal Finance Advice. I believe that stunt was in part responsible for building up my traffic, though, let’s face it, all of you come back just to check whether I saw any more crappy cars.
Since then, my site got hacked and I lost some of my files. I recently moved to my current WordPress platform and almost forgot the annoyances of robot spammers slapping crappy comments every three minutes onto my cracked-out, handwritten blog. However, I haven’t forgotten about the folks whose pixel ads I carried. My plans for those include resizing and placing them back on the site. Oh, and they should appear in random order with every refresh.
That got me thinking about the whole pixel ad schtick. We’ve all heard about the British kid’s brilliant idea of selling pixel ads – he’s made more money in a few months than most people will make in 20 years. I’ve tried to explain the concept to my barely-Internet-literate Ukrainian father, but he just gave up. “Million dolarov? Pixel ad? Kak eto tak?”
Of course, a good idea like that had to be imitated. There are over a hundred copycat sites that exist only to make money the pixel ad-selling way. Existing for other reasons, but still among the sites selling pixels is Nev’s Blog.
I like reading his posts because they are very real. They are dealing with things close to any pf blogger‘s heart – making and saving money, no bull. A while back he placed a pixel-ad rectangle on his site, and made a couple of grand from doing so (to date).
Clearly, it’s easy money, “anyone can do it” – you make a gray rectangle, turn it into an image map, and you’re done. Not so fast, Sparky. Nev is a hugely popular pf blogger enjoying mentions in our nation’s top publications, along with newspapers in such far away countries as Russia.
Still, it an interesting way to advertise, and, quite possibly, a profitable one, too. I took a closer look at his pixel ads just for my own research, and here’s what I found. Nev, I’m going to count your money now.
- In about 5 months he’s made around $2,000. I’m guessing he’s put in an hour and a half of labor, if that. He capitalized on the idea while it was still fresh, new, and exciting. He already had the traffic to sell those ads, otherwise they probably wouldn’t, uh, sell.
- After 5 months the ad rectangle is about 17% filled up (40 out of 240). If the pixels sell at the same rate, in about 2.5 years all ads will be sold, bringing in another $10,000 if the price of $50/ad remains the same.
- To put things into perspective, Nev is ranked about fifty-thousandth on Alexa, traffic-wise. I am about half-a-millionth. It would be at least ten times more difficult for me to sell ads on my site. Therefore, I would have been extatic if I sold one ad in 5 months.
Who are the people buying his ads? At the moment, the dozen sites advertising on Nev’s blog are:
- A small portal of gambling and “other” links;
- A mortgage-related site seemingly built by someone who knew about Jeffrey‘s satellite site idea;
- Two cash advance sites – one a homebrew cash advance site (a ~ tilda in the URL is not a good sign), another a more interactive cash advance site with a shady (non-https) appication process;
- Three blogs, one not updated for a year, one just plain goofy, one a pretty good read, but too impersonal and full of ads;
- A halfway decent resource about a precious metal, another satellite site;
- Two strictly gambling sites – a poker strategy resource and a gambling online resource;
- A meaningless link farm;
- A site dedicated to selling more pixel ads.
If I was Nev, I’d laugh my fanny off. I wouldn’t even care of those people did make cold hard cash from traffic generated by my ads. It just seems so … crazy … that Nev earned two thousand dollars by selling ads to guys whose sites, I’m sorry, have no real value.
The lesson I’ve learned and re-learned is that traffic is king. Speaking of traffic, you know which of the pf bloggers has the fattest flow? Coming up next … on HowToBePoor … dot com.
While I give Nev for creatively incorporating pixel ads. he did a terrible job in maximizing his profit potential (and that is what his blog is all about, right?) here’s why:
He has a popular website – much more popular than mine. He ranks higher in both traffic and by pr than my site. Yes, he’s raked in $2000, but how much is that over the long run? Let’s assume he keeps the ads up 5 years or 60 months. that means that those ads paid $0.83 a month for their ad – a huge bargain for a site with that type of traffic – especially for the placement.
Now look at my rather challenged site compared to his. With my much inferior traffic, I will make that same $2000 in 6 months from advertisers (excluding google adsense) – not quite the same as nev in 5 months BUT I will continue to be paid where he must sell more ads to get paid. After 5 years when he has his $2000, my ads will have generated $19,500 if my prices don’t increase. Even if he completely sells out all his ad space, I still come out ahead with an inferior site.
He has undervalued his site’s worth – not a good thing if you’re trying to maximize your net worth. He could probably sell individual links on the site for well over $50 a month (I know I could if my site had his statistics). While interesting, it wasn’t a very good financial move on his part in my opinion.
Comment by personal finance advice — March 6, 2006 @ 1:47 am
I agree with Jeff, while Nev does get a quick burst of revenue, he’s leaving money on the table. It’s a lot like his experiment with selling water, think of how much he could’ve made doing something else even if it wasn’t as “experimental.” (like if he spent more time on houseofrave) Opportunity cost!
Comment by jim — March 6, 2006 @ 5:58 am
I wonder if Nev’s not comfortable with placing more and better ads because he said a while back that he’s not into the ads, there’s no reason for ads, he’s not going to have ads, “proud to be ad free” type of thing, etc, etc.
I see the same thing happening with the guys who aggregate pf blogs, uhm … forgot the URL. They are “proud to be ad free”, but the truth is, nobody cares if your site has a few ads tastefully (and strategically) placed to make money.
Besides, what choices are there? Google ads … that’s it, really. Others require some “doin” to get in. Hell, I’ve just sent my tenth email to Yahoo! to approve me for their ads, still nothing.
Comment by How To Be Poor — March 6, 2006 @ 6:09 am
Thanks for detailed post about the pixels, I’ve been meaning to write a follow up post about them. I definitely hit the pixel thing at the right time while the whole MillionDollarHomePage hooplah was going on, and that’s why I made the money I did.
I realize NevBlog is terribly underutilized as a money making machine, but I never intended to make money with it.
NevBlog is an INDIRECT money-making machine. I don’t necessarily capitalize off the site itself, but rather what it gives back to me. I may not make an extra few hundred dollars a month from advertisements, but I get mentioned in the top news sources in America which brings me exposure and contacts for real business ventures. I get to post the results of silly financial experiments which may not actually make money, but instead bring knowledge, exposure and experience for the future….if not that, they at least quench my curiosity. There are also a slew of other benefits to running the site which don’t directly involve money.
Google actually repeatedly called me over a year ago asking if I would like to sign up for Adsense, saying I could easily make $500 a month with one strategically placed ad, but I had to decline. $500 extra dollars per month is a nice sum of money, but for now I won’t accept it. I can’t really explain why…just the way I choose to operate.
Jeff,
Yes I am trying to maximize my total assets, but $2,000 here and there doesn’t mean much to me in the long run. House Of Rave can generate $2,000 in a month, and that SINGLE business alone could make twice that easily. I’m involved in over 7 different projects, each with the same or more earnings potential per month. My whole angle is to make money from creating businesses, not my personal website. There are TONS of lower trafficked blogs which make WAY more money than I ever will on NevBlog, and I’m ok with that.
Jim,
The Bottled Water Experiment did take away some time, but it went to a good use. I proved some people wrong saying that it “Takes money to make money”, I got national media exposure, I fulfilled a curiosity and learned some valuable lessons about sales….and more importantly, I have a crazy story to tell!
HtbP,
You’re very right, I’m NOT comfortable placing more ads on NevBlog…..I like extremely easy to use layouts and site designs. I’m not starving for money over here, so for now I won’t put any more ads. I might in the future utilize them again to boost the charity account (as of now, I put very little into each month).
Comment by Neville — March 6, 2006 @ 12:59 pm
Thanks for comments, all.
I guess Nev is thinking along the lines of “this project in kind of like my resume slash contact list slash networking tool, why surround it with ads”.
I’m guessing I’m in a different financial place than Nev is because I can’t imagine walking away on a few hundred dollars of residual income. Whether I’m sleeping, working, or playing, it’s the money that just won’t stop coming.
Besides, after reading our mutual investment-inclined PF buddies, I don’t see it as a couple of grand now, but tens of thousands later on … why lose it?
Comment by How To Be Poor — March 6, 2006 @ 5:15 pm
The ad rates of most cheap pixel advertising web sites range in the five to ten cents per pixel area. Such sites try to make money not by quality, but by quantity. Although the pixel ad craze is still going strong, many fear that it is just a fad and do not consider it a good investment. The cheap pixel advertising rates we see today are a consequence of the mistrust showed by many advertisers who want to make sure they do not spend much on an investment that has a very unstable ROI promise. On the other hand, we have the advertisers that were among the first to buy pixel ads. For them, the high traffic received from the pixel ad website meant an increase in their business profits by 100%, 200% or even more.
Regards,
Michael Rad
Web2earn.com – online moneymaking opportunities
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