We do a lot of online advertising and we’ve found this is the best way to go about it.
Step #1: Test A LOT of Sites
When it comes to online advertising, it’s impossible to guess what websites are going to perform best. There’s only one thing you can do: test a lot of them. I use these networks:

  • Google AdWords Managed Placements (you get to choose the websites where your ads get displayed).
  • Google AdWords Content Network (Google shows your ads on pages that are related to them).
  • AdBrite (the biggest ad marketplace on the web).

Step #2: Test Everything
These are some of the things you need to test:

  • Websites (to see what sites work and which ones don’t).
  • Text vs. image ads.
  • Different sizes for image ads.
  • Different headlines and calls to action.
  • Different marketing approaches.

The keys to effective testing:

  • Define your goal. Your goal should be conversions, not clicks or impressions.
  • Split-test the same kind of traffic. Don’t show Sunday traffic one ad and Monday traffic a different ad. Sunday traffic is different from Monday traffic. The same concept applies for all the other variables. Make sure that when you run split tests you show both ads to similar audiences.
  • Achieve statistical significance. This is a fancy term that means “you need enough data to be confident that the results you’re getting are accurate”.
  • Be very organized and document everything. If your experiments are a mess, the outcome will be an even bigger mess.

Step #3: From CPC to CPM
When you get started, you’ll be using the cost-per-click (CPC) model. That’s a good way to understand what websites work and which ones don’t. Once you get a good idea of what websites are losing you money, get rid of them as fast as possible.
The next step is very important so pay attention. You’ll start using the CPM (cost per 1,000 impressions) model for those websites that worked for you in the past. You’ll get a lot more clicks and will pay less by using CPM instead of CPC. You can manage this through your AdWords and AdBrite accounts.
Step #4: Cut Out the Middle Man
Advertising networks only pay the publishers about 30%-50% of what they get from you. If you pay $2 for 1,000 impressions, the publisher will get anywhere from $0.60 to $1; the network will keep the rest. This is what you should do:

  • Contact the publisher directly and negotiate a CPM price. Offer them 60% of what you’re currently paying. That will work out better for them and you.

Step #5: From CPM to Flat Fee
Take a list of those sites that are performing great and approach their webmasters. Negotiate a flat fee instead of CPM. They prefer this anyway and you can save a lot of money this way. Plus, your ads can be on their sites 24/7 instead of on/off. You won’t need to share the space with other advertisers anymore.
Step #6: From Flat Fee to CPA/Affiliate
Cost-per-action (CPA) marketing and affiliate marketing are great ways to advertise your products because your publishers will only get paid when visitors complete a goal on your site. The goal could be to submit a contact form, proposal request, download a free report, buy a product, etc.
When you get your publishers to become your affiliates, they’ll be a lot more motivated to make your offer work. They’ll be more likely to email their lists about your offer, advertise it in their newsletters and give your banners top visibility.
When you offer your publishers to become affiliates, tell them it’s on a trial basis and if they don’t make more money that way, you can always switch back to the flat fee model. Show them there’s nothing for them to lose and they’ll be happy to give it a try.