Website Ad Sizes, rates and results

Being in the internet advertising business for a long time, I've often tinkered with Ad sizes and format to see what effects they have on revenue. The results of the tinkering are quite surprising and there are some results that were not quite expected.

First off, let me say that besides pop-ups, pop-under, and other obstrusive type ads, the most valueable format(by that I mean the highest eCPM, not necessarily the best conversion performers) are by far 160*600 and 728*90. Advertisers seem to be falling in love with these formats and quickly ditching the 468*60 and 120*600 formats. Now the CTR of these bigger formats is only slightly better usually than the 468*60 and 120*60 formats but the CPM cost of these formats is usually at least 2x if not 3x the cost of regular 468*60 and 120*600.

So who is the winner of all this?

1. Certainly not the advertisers - Generally they are paying 2x-3x times the price for only slightly improved results. I believe that once the ad is clicked on, it does not matter what the ad-size was before, the conversion rate would be the same. I'm not sure why advertisers agree to such a premium for only slightly improved CTR ratios.

2. Publishers do benefit some from it but overall rates and the % of the cut thats been going to publishers from the major networks has been dropping a bit and in many categories, they simply have too much supply and not enough demand. I haven't seen my rates go up significantly since these new formats came up. Also, the extra few pixels is sometimes a lot harder to fit on the screen which obstructs site design.

3. Yes people, it is the large media networks that are getting the lion's share of the benefit from these networks. They price these campaigns far higher than the regular 468*60 and 120*600 ads and advertisers buy into it without realizing that regular banner and skyscraper ads can now be picked up for pennies on the dollars. Publishers will add these formats because they want the new rates and advertisers are taking an increasingly large cut of the Pie.

What is really strange is that its not only CPM ads that re effected by this format change, even PPC ads like google's adsense are effected by this change. I've noticed that the PPC on the exact same ads pay several times high per click if its a 300*250 ad instead of a 200*200 ad(This is just a rough calculation by # of clicks divides by how much I've earned, I can't click on the ads myself so I can't do a 1 to 1 test), even when these two formats have almost the exact same CTR rate, its quite stupid.

What does mean for publishers in general? Well, we need to put these new formats up because they are paying several times what the old formats are paying. This generally means we must design sites with a wider resolution in mind. I suggest making all sites at least standard 1000 width now if not more just because of these new Ad formats. I do not like designing wider sites but with the current state of Ad-size evolution, there is no other choice.

What does this mean for advertisers? It means that you can follow the flow and purchase very costly ads on these new formats or you could be smart and pick up the old formats at a very low cost and only slightly smaller CTR rates. If I were an advertiser, I'd know which one I choose.

What does this mean for media companies? Easy, they make more profits at our expense.