How to Start an Automated Online Digital Advertising Business

Ever thought about expanding your advertising agency revenue without making a large financial commitment? Or starting your own online digital advertising business for a specific niche market? An online automated ad network business serving a niche market can provide you with increased revenue, market visibility and additional client services, for a very small investment with a high return.

In today's soft market online display advertising continues to grow. IAB reports that during the first half of 2011 Internet Ad Revenues at nearly $15 Billion. Internet ad revenues for the second quarter alone reached new heights, increasing 24.1 percent to $7.7 billion. That performance compares to last year's same-period revenues of $6.2 billion, up 13.9 percent from 2009.

Display-related advertising-which includes banner ads, rich media, digital video and sponsorships-totaled more than $5.5 billion in the first six months of 2011. Display increased 27.1 percent over the same period in 2010, substantially exceeding the previous year's growth rate of 16 percent.

Online display advertising accounted for 37 percent of all interactive spend in the first half of 2011, with search remaining the leading online category at 49 percent of the total-nearly $7.3 billion. Search and Display each grew about 27 percent year-over-year, with Search more than doubling its previous year's growth rate of 11.6 percent. "Quote from IAB news release, September 2011"

Vertical market display advertising continues to garner a high percentage of the display advertising revenue as most advertisers know that getting their ads on multiple market related websites is the best way to build brand recognition as well as increase conversion rates. They also recognize the high cost of marketing for reaching publishers in a vertical market. With this advertisers need a vehicle for getting their ads placed on multiple publisher websites in their vertical market.An ad network dedicated to their market can give them, in total,the volume of ad viewsthey need to support their marketing goalswithout making a large investment in marketing.

Ad placement diversity in a vertical market is key to brand recognition and sales.

On the vertical market publisher side, small publisher websites have a hard time selling ad space because their ad views are low but aggregating multiple small publisher websites is attractive to both publishers and advertisers. It creates revenue for the publisher plus website visibility which they would not get on their own.

Verticalor niche market ad networks are the best vehicle for satisfying both the advertiser and publishers' marketing and revenue needs in a vertical market.

To start a vertical market ad network business you must first assess your skills in:

• Ad server technology and implementation.

• Programming.

• Hosting.

• Website front-end development for your vertical to interface with ad server technology.

• Marketing to your selected vertical market.

• Customer Support.

• Internet business planning and implementation.

The key to building a successful vertical ad network business is marketing, marketing and marketing backed by support and a proven ad serving technology.The first phase of building a foundation is to make sure the market the advertisers want to reach is the same as the market the publishers you sign up reach. This is critical for getting started on the right foot.

While you are pursuing a specific vertical market each vertical can have market niches that can be addressed individually to start. If this is the case for your vertical market, first define a specific niche of the market you are most familiar with,then focus on this market niche for signing up your first publishers and advertisers. As the marketing andsales efforts produce positive cash flow, you can expand the marketing efforts to additional market niches to broaden your revenue base and grow your ad network business.

Start small, grow big, sensibly.

Who are the most likely to succeed?

• Entrepreneurs with advertising sales and marketing experience in a vertical market.

• Media companies that want to expand their market penetration in defined niche markets.

• Agencies that want to build clients brand recognition as well as sales.

What leads to success?

Demand + Relevance + Desire + Knowledge + Planning + Perseverance = Success

How long does it take to reach positive cash flow?

Good question.

There are a lot of variables that come into play that will determine when a vertical market ad network business might reach positive cash flow. Your business plan should cover all the possible variables and give you the path to positive cash flow and profitability. If you start with an entry level ad serving approach you could be positive cash flow in 4-5 months. Most other approaches can take 8 months plus.

Market penetration is the pacing factor for determining when you will achieve positive cash flow.

Starting a vertical market ad network business does not have to take months and be expensive if you partner with an ad network business solution provider that can provide not only the ad network platform but also the website front end tailored to your market as well as ongoing business and technical support that compliments your capabilities and finances. Full service ad network providers usually provide a full complement of services for a very small upfront fee coupled with a small ongoing revenue share to hold your operating costs to a minimum while you build your market, cash flow and a valuable asset.

When looking for a vertical market ad network business partner you should consider the following:

1. Proven ad network platform that can grow with your business.

2. Overall services provided. Pick what compliments your needs.

3. Reference ad networks.

4. Overall support capabilities. Business and technical.

5. Time to market.

6. Cost of doing business.

You don't need a lot of money. You can build a virtual ad network business from a small agency office or your home.


Andrew Nester , President/CEO Biz Strategies, Inc. Biz Strategies Provides business management consulting to online businesses. Andrew has over 45 years experience in business management consulting, executive management, sales, senior marketing and engineering with high tech, general business and Internet companies.

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