Long payment terms are just business as usual with ad networks - it often takes our partner Federated Media six months or more to get us payment for ads served on TechCrunch.

I had thought I had been part of internet advertising and gained some experience, but this little tidbit from a TechCrunch article really shocked me.nbsp; TechCrunch seems to be okay with waiting 6 months for payment, and more importantly, considers it business as usual.

Scribefire paid out within 7 days of a month closing.nbsp; While at RightMedia, the books were closed well before then as well.nbsp; Quite frankly, it is shocking that any business would be okay with someone else holding their money for 6 months (think of the interest payments).

Anyone else hear this before?nbsp; Any networks out there able to pull off 6 month payment terms?

The answer is, it depends.  You can’t compare a CPM campaign to a CPC campaign until you make it an apples to apples comparison.

eCPM - equivalent CPM, estimated CPM, or whatever you want to call it.

It is the term that is used to figure out how valuable your inventory is.

For a CPM campaign, it is very simple to figure out what your eCPM is.  They are the same.  If you are paying $10 cpms, then your eCPM is $10.  You are paying $10 for 1000 impressions, or 1 cent per impression.

For a CPC campaign, the equation is :

Where CPC is the cost per click, CTR is your click through rate.

Clickthrough rate is just the number of clicks you get per impression which means our equation now looks like:

If you have a CPC of $1 per click, and a .1% click through rate (1 click per 1000 impressions), it means you are making $1 eCPM (for every thousand impressions, you average one click and so make $1).

Notice that the value of the inventory isn’t solely based on CPC.  There are two factors, CPC and CTR.  There is two ways to make the inventory more valuable to such a campaign, you can either raise the CPC or raise the CTR.  This is already understood inherently.

CPC is negotiated during the sales process and so is not that interesting.  Advertisers and publishers essentially determine what a click is worth to the advertiser.  From here on out, the Advertiser has now said that each click, and subsequent eyeballs to the landing page are worth the CPC.

The clickthrough rate piece now becomes interesting.  If you can raise the CTR, then you have increased the value of your inventory and made more money without making your advertiser pay more (as the advertiser is thinking in cost per click).  If you can increase the clickthrough rate of your ads from 1% of users to 2% of users, you have effectively doubled the amount the advertiser is paying you while keeping your advertiser happy.  This can simply be done by moving where you locate your ads.  If it is above the fold of the page, it will have a higher clickthrough rate than if it is at the very bottom of your web page.

This argument also can be made to the advertiser.  If the ad is more interesting, then, there will be a higher clickthrough rate on it, which is more valuable to the publisher (and will subsequently get you more inventory).  This actually explains the prevalence of distracting ads (all that flashing does produce higher CTR at the expense of looking nice on the page.)

So back to the original question.

If your $0.50 CPC campaign is able to get a .1% click through rate, then it is worth $.50 eCPM.  Compared to the $1 CPM campaign, you are better off running the $1 CPM campaign.

If your $0.50 CPC campaign gets a .3% clickthrough rate, then it is now worth $1.50 eCPM.  Compared to the $1 CPM campaign, you are now better off running the CPC campaign.

Up next, more elaboration on this idea, and even more fun with the CPA campaigns.

In addition, such a move–which was once opposed by some Yahoo execs–would now be seen as injecting energy in the company.

I make no notion of hiding my love of many people who are at Yahoo, I have made many friends there both from Right Media and even Yahoo proper (though many have left Yahoo already).  Still, it has to be disconcerting and worrisome to anyone involved to be reading something like this.  When you are going to be getting energy from the slow lumbering beast that is AOL, you know you are in some fundamental trouble.

My suggestion? 
1) Choose some people and give them control.  There are still plenty of people at Yahoo who want to turn things around.  Or believe, given the lee way, they could help change things for the better. 

2) Let them run amok.  Clear all hurdles in the way.  The goal here is to give them enough rope to hang themselves and make sure at the end of it, no one can say “i couldn’t do it because x,y,z was in the way.”  Some of the initiatives will fail, but the responsibilities and ownership is what is the most lacking now.

3) Hold them responsible.  Once all the hurdles are cleared, then the person should be held responsible for their product.  Maybe the initiative failed, maybe it was due to market forces, so be it, but with the power you have given them, they need to also be held responsible for what occurs.

Essentially, there seems to be too much “this is getting in my way, that group isn’t cooperating.”  Have each group pitch their vision, choose one, and let them have the perogative to get it done.  Tech getting in the way of Product getting in the way of Business will mean nothing gets done…which coincidentally seems to be the current world.

All of this would not be helped in the least by AOL coming into play.  More territorial fisticuffs will just delay anything actually getting worked on and done.  For same reason, a Microsoft buy wouldn’t have helped, AOL doesn’t help.

I have absolutely no doubt that Yahoo can rebound.  You can’t walk 10 ft without bumping into some really smart hardworking people.  But without some strong characters to point in a single direction, nothing is getting done.

End of Rant.

Here is the most recent piece of it.

I just read this: http://paul.kedrosky.com/archives/2008/09/22/quote_du_jour_2_1.html

And it got me to wondering.

If they can only provide 15-20% returns.  But are leveraged at 30x debt to equity.  Doesn’t that mean they were only making about .5% for each factor of equity?

That seems to be FAR lower than what the bank would pay me for keeping my money in their savings bank account…

In other words, it would seem, if I could get 30x out of my equity, i could make 15-20% returns on my money just by putting it into fdic banks?

Granted, this is an apples to orange comparison as GS is a lot bigger than the small man such as I, but the point remains.

So, what is it that I am missing from this thought process?  Please, all you financial peeps shed some light?

I can’t go an hour without it crashing.

Wow, its been a long time since something I read hit me as hard as this.

I think this gets to the very crux of the problem. We are talking about kids here. If you build an interest in science now, you will get them interested for the rest of their life. Instead though, we interest our kids with Barbies and American Idol. Is it of little wonder that Reality shows now are more popular than say Jeapardy?

These little things are exactly what gets ingrained into a culture. It is exactly how cultures are built. We can’t see it as well as we exist in the gradually changing culture, but it is there none-the-less.

The fun part is the quote.

Sadly, it would’ve made sense too, if they said 300×250 (well closer).

Instead, 150×300 means they are now 4x the size instead of “double the size”.

On the other boat though, is those whom Scribefire can’t make edits. If you get asked to copy and paste code after the </body> tag, this would be you. In this case, your experience is significantly worse. Dragging and dropping ads gets delayed by up to 15 minutes. You have to go into your file manager and speficially edit a file. It is even hard to figure out exactly which file and where to make the edit.

Well, this post is for all those in that second boat. In order to jump ships (and become one of those who are using the easy Scribefire), all you have to do in your wordpress install is to change the permissioning of a single file. If you go into your file manager, and edit the permission of the footer.php file of your theme (which can be found in wp-content/themes/yourtheme/footer.php). The permission can be set to 777 then you can join the masses in having a pleasureable experience. If you change all the files permissions, in the future, you can edit your themes directly from wordpress!

One of the most common is definitely the “I can’t log in using Scribefire, but I can log in fine from the web page”.

In this case, the two most prevalent reasons are:

1. When entering a blog, instead of just clicking the “Next >” button, the person would click “Configure Manually”. Then, from the list, the most common choice is “Wordpress.com”. Since they are actually using their own install of wordpress, they actually aren’t on wordpress.com and so get invalid login/password.

For this case, adding the blog without clicking “Configure Manually” fixes the problem.

2. The second complaint is one I just figured out, and is the impetus of this post. It seems, for whatever reason, a blog may not have the xmlrpc publishing option checked and this is causing problems. In order to turn on xmlrpc publishing, the user should go under Settings -> Writing, and check the checkbox next to “XML RPC Publishing”.

In the current world of networks of networks, and exchanges popping up left and right, there is really going to be only 3 places your company can live and then succeed. You have to either control Advertisers, control Publishers, or be the technology force driving the backbone of the whole system.

Let’s start with Publishers as their explanation is the easiest. As the controller of the eyeballs, you are controlling exactly what is sold. From which users, to what placement, it is all in the realm of control when you are a publisher. That control is the same whether you own Yahoo.com, or whether you are fredlu.com. In order to succeed as a Publisher in this dynamic, you just need to draw eyeballs. You control the right eyeballs, and you can monetize it however you want. The more eyeballs, the more quality eyeball, the more money you will make and the more successful you become.

There are plenty of articles already on the internet to help you draw people to your site. Scribefire.com has been putting up numerous entries to help the average blogger increase their readership. That would be a good place to start if you want to be successful as a publisher.

If you are a company and not just a blogger, then it means getting exclusive selling rights. There are various ways to do this. If you are GigaOm, you buy up websites. If you are Glam Media, you are providing guaranteed revenue. In short though, the goal is to be the single contact point for the advertising on those websites.