How Ads Really Work: Superfans and Noobs

The obvious way to make the most money possible is to plaster your sites in as many ads as your visitors can stand. But if you look at your traffic, chances are you'll lose little by turning ads off completely for your biggest fans.

Online advertising is hot right now (the big web properties have dropped billions of dollars on advertising companies in just the past few weeks) and I'm seeing all kinds of creative ways to stuff more and more advertising into sites. Giant flash ads that launch when you accidentally roll over them with your mouse, auto-playing video blaring at you while you're trying to read something, and those awful pop-up things like Snap previews and IntelliText ads. It's getting to the point where, frankly, things have gone a little nuts — these ads might be supporting a website financially, but they're hardly nurturing their communities. Though I've written about the wonders of Google's AdSense, I've also written about why advertising in RSS is a bad idea. Today I hope to convince a few publishers that there are times when turning ads off is a good idea.

The two types of visitors that matter

Last summer I started using Google Analytics to record behavior on my sites and it wasn't until several months later that I started delving into the statistics. My sites had lots of revisits from a core group of regular readers and then it would trail off to lower numbers looking at fewer pages. This was a totally expected trend and meshed with how I've maintained sites for years. The conventional wisdom is that you create a site you love and hope that others will find it and like it as well, and then you keep writing, photographing, designing and creating for that audience. Your biggest fans help drive the site and their enjoyment springs you out of bed every morning. A second priority, but still quite important, is trying to convert new visitors to fans. That's how I've developed, maintained, and thought about sites for years. But there was one important group I underestimated.

My reports from Google Analytics were the first time I noticed the huge numbers of people who were new to my sites. I expected it on one site that gets a lot of specific traffic from Google searches, but then I noticed it on other sites with completely different areas of focus. Then I started asking friends who run other sites and heard they had the same results. It didn't matter how big or small the site was, how narrow focused or completely open-ended the content was. The biggest single group of visitors to these sites were people who had never seen them before and would never return again. Among my informal polling of friends and my own sites, the lowest percentage of one-time visitors was 53%. Some sites had as much as 75% of their traffic come from people that had only visited once.

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I'd long heard that traffic patterns followed a power law, with the most traffic from a small group of super-users, but I'm finding my audience falls into a bimodal distribution: tons of one-time visitors and the balance at the opposite end of the spectrum with lots of repeat visits, with small amounts in between. This is important because those two types of visitors ("Superfans" for the heavy repeat visitors, "Noobs" for the newbie one-time visitors) interact with your site in dramatically different ways.

How ads really work

When people use search engines to reach your site, they're looking for something. Chances are, your site probably doesn't have what they are looking for, but with context-sensitive ads like Google's Adsense, they'll likely see ads for things related to their search terms. Imagine that — ads that actually make a page more valuable to readers, not just the site owners. Random people searching for information are much more likely to click on those related text ads if the ads help them find what they are looking for. Compare that to a regular visitor that comes to your site dozens of times a week: How often are they going to click on any ads? How quickly will they learn to visually filter out the ads entirely from the experience? Superfans develop banner blindness extremely quickly.

What I realized when I looked at my Google Analytics reports was that the majority of ad clicks are coming from these one-time visitors looking for information. I do it myself when searching, especially if it's for a product of some type. I'll search, dive into the results, and if the top 5 don't have what I'm looking for, I'm very likely to click on related ads to see if that's what I'm looking for. New visitors to a site love to click on anything that brings them closer to their goal, and often times that's an ad. This, in essence, is the entire business model of per-click advertising.

Bringing it together

About five years ago I started toying with advertising on my sites, but I wasn't making much and at the same time I was reading one email after another complaining about the new ugly ads. When I was considering adding some graphical ads I asked a few friends what I could do to lessen the pain on my active membership. "Turn them off for members" was the suggestion from Rusty Foster. It was simple, yet brilliant, and I decided to give it a try.

My hunch was it wouldn't change the income very much and I'd get a lot of happier users in return. What I found was that overnight, the click-through rate increased. The overall impressions went down, but non-members were clicking much more than frequent visitors. For a pay-per-click model like Google Adsense, this meant I lost virtually nothing by turning ads off for the most frequent visitors, and the numbers increased for what did get served. Members of the site were much happier with the ad-free experience and it gave regular readers an incentive to become full-fledged members of the site. For the majority of total visitors to my sites, those one-time random search result drive-bys, nothing changed for the better or for the worse.

Since I started doing things this way on MetaFilter, a lot of other services and communities have done the same. Rusty did it with Kuro5hin after hearing how well it went for me. In the early days of Flickr, they used to show text ads alongside photos for non-logged in users. I notice that Vox inserts ads in between posts on my neighborhood page whenever my login cookie expires — logged in users see less intrusive ads. A few months ago, I was looking at a Twitter message I left and noticed there were these odd floating text ads near my icon, where my message was popping out. I sent off an email to Ev, condensing the gist of this entire essay into an email and mentioning how Twitter permalink pages were visually confusing — it looked like I was saying something about a text ad. Ev replied quickly, saying they were thinking about doing it and the next day ads were off when I was logged in.

Downsides

There are of course some downsides to doing this. Some advertisers really want to reach your core membership, especially for real techno-geek type products. Also, if you're serving up ads on an impression basis (like CPM), you will of course lose out on a decent percentage of your traffic. On the other hand, if you consider that your biggest fans might load a few thousand pages per year on your site, chances are you'll just be losing a few potential bucks for each of them which should pale in comparison to the intangible value they bring in return.

The easiest way to implement this is on a site that requires registration — members don't see ads, people without a login cookie see them, but what about sites that don't have strict membership status? It's still possible to do something like this, by using some simple cookies. Set a cookie for new visitors and simply look for the existence of a cookie when serving ads. If you want to get fancy, you could even count the number of visits and clear any ads for people that visit more than x times a month. In a few minutes of googling, this intro to cookies looked like it covered pretty much all you'd need to know to implement this.

Conclusion

If you've got a site/service that is ad-supported but also has some membership, do your best users a favor and think about turning off ads (I'm looking at you Facebook and LinkedIn). It's likely to make a small dent in your bottom line but will pay off with a better user experience for your site's biggest fans.

(and yes, I should state upfront that I did indeed add advertising from The Deck to this site recently and I don't filter it out for repeat visitors. It's not Adsense and I actually like the products being advertised and it's done in a clean non-obtrusive way.)

May 30, 2007 at 17:54 #
Steven Garrity

Good article, Matt. I didn't want to show adds to people who read my site. However, I too had this mass of unwashed search-referred users that probably didn't find what they were looking for, and would never come back.

While I enjoy the openness of the web and would never close off the pages, I felt a bit like these people were noisy strangers wandering through my garden party (yeah, I just compared my weblog to a garden party).

Not wanting to bother my regular readers, but somehow wanting some compensation for the loads of one-time traffic, I added Google Adsense ads to the site. However, the ads are only shown to visitors referred from a search engine. I do a quick check for major search engines in the referrer string (google, msn, yahoo, etc.), and if they're a visitor referred from a search engine, which almost never includes my regular readers, they see a (small) Google ad. If you visit the site via a link from a non-search engine site (other weblogs, etc.), a bookmark, the RSS feeds, or if you just type the domain name in your browser, you won't see the ads.

This solution somehow makes me feel better both about having some ads on my site (I think I have first-world guilt syndrome), and about having these confused strangers on my site (if you make a post about a company or product, someone will visit your site thinking you are that company/product).

May 30, 2007 at 20:09 #
J.D. Roth

Moving to a "no ads for superfans" model is one of my goals for GRS. It's been apparent to me for some time that most of my site's revenue comes from one-time visitors, as you describe. I don't have the technical know-how to pull it off, though. I keep hoping to find a WordPress plugin that will make this easy.

Is your stance on RSS ads unchanged? I subscribe to ~150 feeds, many of which have ads. I find that I don't notice the ads, and it doesn't bother me if a feed uses them. The GRS feed has them, and they perform quite well. But I've considered removing them.

You know that I struggle with appropriate advertising at my site. It's an ongoing dilemma. What I *really* need to do is quit my day job and take this blogging thing full time. I'm close. If I didn't have a mortgage, I could do it today. Maybe next year. Maybe then I can work on pursuing "sponsors" full-time. (How cool would it to be to work out something with Vanguard, for example, to sponsor the site for a reasonable monthly fee?)

Nice post, Matt.

May 30, 2007 at 20:10 #
Jeff

Great article. I noticed one thing though. Google's Visitor Loyalty chart is a little misleading because the bars on the left count single visits, but the bars on the right side are lumped in groups of 50 of 100 visits. It might be power curve-like if you plotted the data on a chart with all the bars measuring the same increment.

I don't think that affects your argument about hiding ads from your regular readers, though. Very nice.

May 30, 2007 at 21:07 #
Jaime Macias

This is very interesting approach. I think the hurdle for creating a hard/fast rule is that in a situation like mine where Im trying to sell a Direct advertising relationship based upon demographics of a 350K userbase is that the advertisers want to reach the logged in traffic way more than the noobs. I think an alternative is a different type of advertising mix where logged out trafic gets a more traditional mix of adsense/banner networks (traditionally annoying) and the logged in users get a premium advertising experience (a la the deck) with a lower random factor and higher mindshare. Thanks indeed for bringing this option to the table.

Jaime

May 30, 2007 at 21:21 #
Matt

I agree with almost everything written in this article, however I don't understand the jab at Facebook in the last paragraph. The way Facebook works, you have to be a member to see everything on the site except pages that prompt you to login. These login pages don't have any ads on them. Therefore turning off ads for members would effectively mean removing ads from facebook altogether, which, no matter how much I may hate ads, doesn't seem a realistic business model.

May 30, 2007 at 23:38 #
Denil Wickrama

This post is brilliant. I will be using this technique on my sites. The Superfans are your friends, they are the loyal clients which will blog about your site or bookmark it in social networking sites. Treat them as well as you can. Meanwhile, the undecided Noobs get an ad served to them while they browse.

I strongly disagree that this model would be useful for Facebook or LinkedIn though. Such sites are really useful only to members. No one browses into and out of Facebook or LinkedIn. The fact that Facebook serves adds to me, doesn't make me any less addicted to their services. I think your advice applies primarily, if not only, to blogs and tutorials.

May 30, 2007 at 23:42 #
Matt Haughey

I admit Facebook isn't a good fit, but I'll insist that LinkedIn is perfect for this. LinkedIn has their entire profile system open to Google and I'll land on LinkedIn profiles in the top 5-10 results for anyone's name I Google these days (if they have a profile there).

On the upper right hand side of LinkedIn pages (when logged in) there are some Google text ads there that I've never in a million years clicked on while using LinkedIn as an active member, but I'm sure people searching would follow them.

So I guess I should update my post to say LinkedIn should do it, Facebook should make more of their pages public to Google, then do it.

May 31, 2007 at 12:41 #
justin

I've had this on dslreports.com for years. Our free-to-join logged in users have never seen ads. It never made any sense to me to annoy our regulars who do so much to provide feedback. In fact, I provide a one-click disable-advert link for anonymous users as well, on the grounds that if an anon user doesn't want to see ads who are we to show them, and waste bandwidth doing so? This only improves the click rate for those that don't disable ads.

(by the way, your fade-out bottom margin makes commenting very difficult if the comment box happens to be the thing faded out, and you can't easily reach the scroll bar because it is under the bottom margin as well!)

May 31, 2007 at 14:06 #
theothereye

Even worst, the noob path through search engines is to click the "sponsored links" instead of classical search results. And then they would click on the context-sensitive ads on the visited websites.
That makes an incredible surfing scenario where the visitor is endlessly visiting websites by clicking on adverts.

May 31, 2007 at 16:49 #
Justin George

This is precisely why ad-blocking technology (with some form of a bar to adoption, even a low one like mentioned on dsl reports above) is such a boon to advertisers.

People are self-selecting into the 'susceptible to ads' and 'never look at ads' market.

May 31, 2007 at 21:10 #
eas

Thanks for posting this. I took the thoughts you posted about AdSense on your other blog a few years ago to heart, though I haven't had enough opportunity to put them into practice (other than keeping ads off the front page of my obscure blog).


I posted the link over on news.ycombinator.com and it seems to be getting voted up, so I hope some of the young entrepreneurs over there take it to heart. Far too many often express some combination of: "I never click on ads, my friends never click on ads, only idiots click on ads, you'll never make money on AdSense..."

I don't think Facebook should open more pages to Google. I think one of their big distinguishing features is the amount of control over their personal information and postings they give their users. I think they have other intriguing ways to make plenty of money.

June 1, 2007 at 02:44 #
Ted Rheingold

Very stimulating.

The Dogster loyalty curve is very like this with peaks at the left and right fringes (though the 200+ is closer to the 1 level =)

But I never thought about changing the user experience based upon the visitor type, but I'm sure there are significant revenue and feature display options that could be based upon superfan and noob.

One fear is showing a noob page to a superfan who happens to be surfing on a friends computer, but I really like thoughts this is instigating.

June 1, 2007 at 07:48 #
Matt Haughey

Ted, I imagine with something like dogster, there'd be useful dog-related ads that even members would want to see, but you could probably play with the amount or placement of ads based on whether or not they've ever seen your site before.

One fear is showing a noob page to a superfan who happens to be surfing on a friends computer

In my experience it hasn't been much of an issue. The few times someone has said "hey, I saw an apple ad on the site using a new computer before I logged in" people usually answer with "well, just login and it's gone, what's the problem?"

June 1, 2007 at 08:19 #
Brandon

Great post, it really clarifies all those random visits I get that don't really do anything.

June 1, 2007 at 08:20 #
Antonio Evans

Our site is a food and dining social network and we've seen this issue crop up in alot of our development meetings. How to be a for profit website but maintain a user experience that doesn't feel like a car salesman. In the next few weeks we are implementing a similar "elite" user ad reduction. We do believe though that adds do add to pages in that they do provide content which some users find quite userful.

June 1, 2007 at 08:36 #
Ben

This is a great article, I've been contemplating adding user accounts to some of my websites, and I think after this article I will, but I'll keep the ads for the non-users. Very well written.

Ben

June 1, 2007 at 08:39 #
John Steel

Spot on Matt, but theres another aspect you may be interested in. If your site is very secure, you might arrange it such that logged on users go through SSL (that golden padlock really is reassuring for them). If you do this, you'll get a whole load of "parts of this page are not secure" messages when they go from non-SSL to SSL. This hit us with phonewebcam, as again the site traffic pattern is very similar to the one you described. Obviously, the Google ads (or whoever serves them) are not SSL encrypted, so you're forced to drop them anyway - as well as doing your members a favour!

June 1, 2007 at 08:46 #
Jon Bell

Your original adsense article spurred a lot of people to dive into adsense. I think the picture of all that fanned out cash had something to do with it :)

Hopefully this article will help spur a new level of understanding about ads. They're not evil, but plastering 95% of your site with ads (for all types of users) just doesn't work.

Your ideas are counter-intuitive to a lot of marketing folks, but it was explained well enough that I hope it sinks in.

June 1, 2007 at 09:22 #
Jenn

Wow. I just clicked the link to your first adsense article and I remember reading that when you first wrote it. I can't believe it was 2003! How time flies. PVRblog is still the bomb and I'm now on my second TiVo. Greast post, Matt. As always.

June 1, 2007 at 09:33 #
Mindables

Great article. I found it on Digg and decided to talk about it on my own blog. Thank you for the information.

June 1, 2007 at 09:47 #
Video Game Debate

One thing I've been working on doing is having different ads for different users. Google Adsense ads seem to work the best on users that come from serach engines. I plan on cutting out most ads for registered users, except for specific items I think may be of value to them (oh yeah and make it so adding/subtracting ads don't break my site).

June 1, 2007 at 10:59 #
Robert Cockerham

Good idea, well explained.

It fits in the television world too, occasional viewers watch all the ads, hardcore fans tivo & skip ads or get the DVD & skip ads.

Did I ever tell you about that time I asked readers to NOT click on ads for at least 24 hours after a new story posted? Oh my god, that was fun while it lasted.

June 1, 2007 at 11:54 #
John S. Rhodes

This quote makes no sense to me:

"What I found was that overnight, the click-through rate increased. The overall impressions went down, but non-members were clicking much more than frequent visitors."

The user experience changes not at all for non-members. It's status quo so what would drive up the increased clicks? There's nothing net-new added...

Throw me a bone!

June 1, 2007 at 12:08 #
Matt Haughey

This quote makes no sense to me

Click-through rates are dependent on all pages served, so if you cut out the ads that superfan users weren't clicking on, the rate goes up.

Example: (just to make the math simple even though it's not exactly accurate) say I display ads on 10,000 pages and the readers are 50%/50% new users/seasoned users. Let's say the new users click on 2% of the ads they see, while the seasoned users click on 0%.

My click-through rate would be 1% on those 10,000 pages. If I stop serving ads to readers that revisit, then my total pages go down to 5,000 ads served, but the rate goes up to 2% because it's not being diluted by the non-clickers.

Since stuff like Adsense is based on clicks, it doesn't matter if I serve 5,000 or 10,000 pages, since the experienced users weren't adding anything to the bottom line.

June 1, 2007 at 13:02 #
Stephen Johnston

Can you tell me or give me a hint as to how exactly you correlated visitor loyalty to adsense revenue? I'd be much obliged.

June 1, 2007 at 13:10 #
John doe

Question: Why do I want members and superfans if their pages are not generating revenue?

June 1, 2007 at 13:13 #
John doe

Not to mention, the superfans are also the ones that cost the most money to satisfy, the most bandwidth. Most high-paying campaigns have a limit of one unique impression per day. My strategy is this:

Get them in, get them out.

I want visitors to come once a day for 2-3 pages and then leave. I dont want superfans if they have no ads..

June 1, 2007 at 13:31 #
Matt Haughey

Stephen, I didn't mention specifics, but whenever I've done a campaign to just non-members or both, the "both" campaign always performed poorly in the click-through department. You can test this yourself using Google's "channels" for adsense to see real data on your own site.

John doe, it sounds like you already have a web site geared toward whatever goals you have (sounds like money in your case). For me personally, I build sites geared towards people. Every rabid fan of my sites helps make it great and helps spread it to their friends and brings more people into it. Members bring great conversations and additional insight. That's the kind of thing that gets me out of bed every morning and gives me motivation to work on my servers. I build interactive communities that rely on people joining and using them. This means for one site, I didn't make money for the first five years I ran it but I still had a great time, met a lot of interesting people, and learned tons of lessons from it.

Random people just reading something on my sites and leaving doesn't do anything for me, though with something like adsense, it does result in a bit of revenue. That's not my main goal, so that's not the kind of sites I build.

June 1, 2007 at 14:55 #
jldugger

I'd bet that if someone wants to get your core audience, they're also willing to contact you and pay directly, if you make it known that you're interested. Penny-Arcade operates this way. These sorts of ad campaigns are probably even higher margin than the business Google's after (though a much smaller market overall).

And of course, the superfans are the ones who buy your book, so don't got throwing away superfan features just yet!

June 1, 2007 at 19:53 #
Brad Pitzel

Until now, I thought it was huge problem that my site has a high number of new, never-will-see-you-again visitors. I'm surprised this is a common visitor trend.

But based on this article's findings, if you're using ads for a majority of your revenue, you want this behaviour. You want the high click-thrus of noobs.

On the flip side -- if you're really gunning for a majority repeat-visit audience, this could mandate a subscription / pay-for-use model to keep the business in business, since your loyal users won't feed the adsense cheques.

June 1, 2007 at 20:44 #
Mike sabat

Matt,

Great site - I just found it and I love the design and you write well.

I can totally agree with ad blindness. I swear I have no idea that ads are on sites, they are just invisible to me. That is unless they are horribly annoying and they make me leave the site.

I look forward to reading more.

June 1, 2007 at 21:57 #
hanford

I did this for one of my sites but I didn't use "member" vs. "non-member" to determine when the ads got shown, I just checked the referral site. if there was no referral site, it meant the user had bookmarked it or typed it in directly, so they were probably a return visitor. I also provided specific start pages for members who wanted to use a website-based bookmarking service like delicious or netvibes. these special pages disable the ads even if there's referring site data.

June 2, 2007 at 02:39 #
Ed

This post echos comments made by Seth Godin, last year.

There is also a neat little wordpress plugin which implements a system for only showing adsense to users who haven't been to the site before (or Noobs as you put it).

June 3, 2007 at 11:41 #
Bobby Hewitt

A long overdue method of segmentation on the web. Removing ads for power users is exactly the ytpe of forward thinking the web needs for the future. Why should we be talking to our power users the same way we speak to our first time customers? My point is we shouldn't. Removing ads for log time visitors is along the same mindset.

June 3, 2007 at 17:17 #
Dexter Zaf

Very good analysis. I also noticed this trend on my website. Superfans are ads blind, and the one who clicked adsense most are coming from Google,Yahoo and MSN search. Luckily for my site, these so called on time visitors are coming back. I think it depends on the visitors what type of info they are looking for.

June 3, 2007 at 18:44 #
Jared Schwager

Thanks for this great article! I've just started my own technology blog and have been looking into all the ways I can monetize it. I had at one point thought of putting ads in my feed, but after reading your article I don't see why I didn't think of it before. I myself only click on ads if I'm searching for something specific. I don't just willy-nilly click on ads if I'm just browsing one of my favorite sites (that is, unless I want to give them a bit of money).

June 4, 2007 at 01:57 #
Donncha O Caoimh

Good essay and mostly reflects what I'm doing on my blogs and it certainly hasn't diminished my revenue.

On my blogs I place adverts on posts that are over a month old, regardless of where a visitor came from.
If a person leaves a comment they're regarded as a "super fan" and as long as that cookie lasts they're not shown adverts.

It works really well, and I must get around to releasing the code at some stage...

June 5, 2007 at 04:51 #
Mike C

Matt,
I was referred to your site by a friend and found it quite refreshing. This last post offers a new perspective on serving ads on blogs. Personally being a new blogger i have yet to dabble into this area but it seems the logic is not perfect:
As someone noted here it would be more optimal to serve ads (or related media) on a per context basis. This might mean that people referred form search engines would be well served by the Adsense style ads. Others might be served by different augmentation. This could be context sensitive link lists depending on the referring agent or say what pages i view on the site. not sure what the case with your website is but i assume every regular reader has some agenda. Some might be personal fans, others interested in the space you talk about and so on. Serving them with specific customizations might prove useful not only from the revenue generation perspective but also for satisfaction and retention. Is there no such tool that can create context sensitive dynamic content in a semi automatic way?

June 6, 2007 at 23:08 #
James Gross

Does anyone see a conflict of interest between a company that controls much of the traffic to your site,is the same company that pays you for the clicks in the ad code on your site? Is that a bulletproof business model or a house of cards waiting for someone to knock over?

June 10, 2007 at 04:36 #
Adrian

I did this last year and am quite happy with the results.

I added a further parameter of not showing adverts on the last 6 months of posts or the home page. So the experience for new, possibly would be readers is also retained.

June 10, 2007 at 23:39 #
stavrosthewonderchicken

Well, Matt, this has finally tipped me over the edge, and I've set up Adsense for search engine visitors on my main site. Thanks (I think!) -- we'll see how it goes.

How I did the conditional display thing with Movable Type is here.

James, yeah, I've written about that a few times. It was ironic to display ads on pages that were mostly only seen (after the initial publish) by Googlenauts -- it's even more ironic to serve ads only to them!

Strange days indeed.

June 18, 2007 at 13:38 #
Jonas

Matt,

Good analysis, but as you said yourself this really only makes sense for sites that run mostly CPC ads.

The majority of my revenue comes from CPM adverstising, not CPC. These advertisers are trying to reach the core "influentail" users of your site. So in this case you are doing the "high" paying CPM advertiser a disservice by not showing ads to all of your users? You also stated that "super-users" are blind to the ads anyway, so what's the difference if they are there or not? My guess is that they do see the ads and there is some level of branding going on. One of your "super-users" may actaully see a product they are interested in.

Basically, all I see here is a way to not show CPC ads that deliver little revenue, rather than rewarding your users. Makes sense, but wouldn't it make sense to show high paying ads to the "influencers" that advertisers will pay to reach? Thus making those pages more valuable.

Here's a test I would be interested in. Test the real loyalty of your users and charge them $5 per month (or even year) for ad free content. Betcha, most will stay with the ad supported, free model.







 


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