Andrew: This interview is sponsored by Grasshopper, the virtual phone system that entrepreneurs love because you can use your own phones and manage it on the Web. Check out Grasshopper.com. It’s also sponsored by Wufoo where you can go right now to get embeddable forms and surveys that you can add to your website for free. Go to Wuffo.com. And it’s sponsored by Shopify. When you go to Shopify.com, you can create a store within minutes and have all the support and features that you need to make that store grow. Check out Shopify.com. Here’s the program.
Hey, everyone. It’s Andrew Warner, founder of Mixergy.com, home of the ambitious upstart. I’ve got a beard, I’ll explain that probably later on in the interview. Today’s guest is Todd Garland. He is the founder of BuySellAds.com. Todd, actually, is someone who I met via email. You’re a viewer of Mixergy, right Todd?
Interviewee: I most certainly am.
Andrew: You know what? I love the audience that I’m attracting here with Mixergy and I’m so proud that you’re out there listening to my work. The way that I met Todd is he sent me an email and he said, “Hey, maybe I can help you out with your ads.” We talked back and forth, I wanted to figure out what I should be charging, how I can increase rates, how I can grow, and so on. He was just incredibly helpful. So I said, “Hey, Todd, why don’t you come on Mixergy and talk about some of the ideas that you told me about how you’d help me, I’d like you to help the audience.” We also did a pre-interview where we went over some of the questions I’ll be asking and I discovered that there’s an interesting business behind BuySellAds.com. For example, how much outside funding do you, guys, have?
Interviewee: Zero right now.
Andrew: Zero outside funding. How much money did you, guys, make last year?
Interviewee: We did all right last year. I’d rather not get into the exact numbers, but we’re growing(?), we’re doing well.
Andrew: He’s smiling because we talked before the interview about whether he could give out the numbers or not. He and I talked privately about what these numbers are like, but we agreed that we wouldn’t be talking about it here. That’s why I’m not going to keep pushing him for those numbers. But what about how many ads you, guys, serve?
Interviewee: For example, last month, we served 2.2 billion impressions, that’s across roughly 1,500 sites. Since last year, that’s grown just sort of 400%.
Andrew: 1,500 sites, what kind of sites do you, guys, represent?
Interviewee: Primarily sites that are in either like the iPhone App Review space, Web design development, programming, those types of sites right now. Primarily, just because there are a lot more hobby sites in those niches.
Andrew: How many impressions does your typical site have?
Interviewee: On average, I say a site would have maybe a 150,000 impressions a month. I think, a lot of larger sites probably right around a million and that’s kind of their sweet spot there.
Andrew: A site that has let’s say 100,000 impressions a month. What kind of revenue can they generate?
Interviewee: It definitely depends on the site. There’s no straight answer, but my best guesstimate would be you’re looking at maybe $500 a month, $1,000 a month. If it’s a site that’s very, very specific like, for example, site like Mixergy. That kind of traffic would probably earn three times as much per month. So, it depends on the audience, too, and how kind of unique the content is really.
Andrew: I like to hear that, that we’d get three times as much as the average site, at least. And that’s 100,000 unique impressions, we’re not even talking about unique viewers.
Interviewee: Yes. I’m just going up straight impressions is kind of the easiest metric we use to gauge sites right now.
Andrew: By the way, I am looking at myself here with this beard. I think I should just explain it because I’d be curious about what’s going on. [xx] to me looked all kind of different. Already I’ve got dark eyes because the lighting in here is terrible. I’ve got now dark on my face here on my chin because I didn’t shave this morning. Of course, I’m dark complexioned so the whole thing looks like a big dark spot on people’s screen.
Actually, I’m here in Buenos Aires. Usually, I have two razors – one backup and one that I use everyday. Olivia unplugged my regular razor to plug in her iPod so she can listen to music as she was getting ready for a run. We forgot to plug my razor back in, and I said, “You know what? I can either go out and get a new razor and shaving cream and find a way to shave quickly in the morning, or I could just save the time and come in to work and deal with it.” Who knows? Maybe people see this and say, “Andrew, that is the handsomest you’ve ever look. You’ve got to work that look.” Maybe [xx] knows something for next time.
MikeB(?) in the audience, he’s making a couple of comments. What do you think, does this look better or not? We’ll find out.
Interviewee: I usually right at work unshaved, so this is actually a rare day for me. I’d to shave yesterday for Chris(?).
Andrew: But you didn’t shave this morning for this interview, did you?
Interviewee: No, no.
Andrew: Ordinarily, I wouldn’t shave when I go on to work. Especially not here in Buenos Aires; nobody shaves, everyone wants to look like Ché Guevarra.
Andrew:..especially not here in Buenos Aires, nobody shaves. Everyone wants to look like Che Bu Verra. They all call each other Che. So, I do it because, you know, like I said, the rest of me is all dark, I might as well have just a little bit of lightness on my face
‘Andrew and Interviewee talking over each other’
Interviewee: Sorry, I was talking over you there. I lived in Puerto Alegre for over a year, back in 1999.
Andrew: Where’s that?
Interviewee: It’s a little bit, kind of north, north east from where you are; Buenos Aires, maybe like eight hours by bus.
Andrew: Oh, Wow. I’m dying to ask you about it, but I can see that I’ve already gone a little too far away from business and I can hear the person out there, who’s listening to us on a run, saying “Get back to business! There’s something I want from this program and you are not giving it to me.” So, lets give it to them.
We’ll do this interview in two stages. First I want to find out more about your business, how you grew it, how you built it, and how you’re profitable now, right?
Interviewee: Oh yea, we were profitable from pretty much the first day.
Andrew:Beautiful, I want to go over that biography and I’ve got a few questions for you that I know some of the people in the audience are going to ask, like, how do you know when it’s time to charge? Where do you start getting your first advertisers? When is it time to increase prices? How do you do it without insulting the people who you started advertising with in the early days? What about how many ads to put on site?
All of those questions that I know are on my audiences mind, but first I want to establish your credibility, let them know why you are the guy answering it.
So, what was the original idea for “BuySellAds.com?
Interviewee: When I started out, I was actually running two sites as a hobby, myself. One was called “CSS Elite”. It was just another one of those CSS galleries, and the other was called “13 Styles”. It had free CSS menus that were free to download. By trade I am a web designer/developer, so naturally I am interested in these types of things. The thing that was the most frustrating about these sites, because they weren’t my main source of income since it was kind of like a hobby, is that I would be at work and I would have to be dealing with these advertisers who wanted me to put ads up, take ads down, figure out payment and all this kind of stuff. It was a real pain. So, the BuySellAds idea grew out of my frustration of having to do this on my own and there not being something else out there to let me buy and sell ads the way I wanted to do it.
Andrew: What year was this?
Interviewee: This was the end of 2007. It’s when I first started talking to my wife about this idea every day.
Andrew: There were already ad networks out there in 2007, and there were already people out there who were selling ads. What was the opportunity that you saw?
Interviewee: I just wanted to sell ads at fixed 30 day rates. It’s really that simple
Andrew: What does that mean?
Interviewee: Basically, I would tell an advertiser “You can have this ad space on my site, this size, lets call it three hundred by two fifty and it is going to cost you a hundred dollars for the month”. That’s as complicated as it really was. So, I would say “send me a hundred dollars”, I’d put the ad up for the month, and ask for another hundred dollars the next month and hope they didn’t cancel. I couldn’t do anything that simple with any of the other ad networks.
Andrew: Why? How were they operating?
Interviewee: Alot of them, if you take Google “Ad Sense” for example. With Google “Ad Sense”, you grab the snippet of code, you install it on your site, and magically ads are appearing. You’ve got advertisers for your site, which is great. That’s awesome. With BuySellAds, we are a little bit different, we’re not contextually matching those advertisers to your site with some special algorithm. It’s those advertisers who are directly deciding to advertise with you. So, the model is a little bit different. Traditional ad networks all work that way, on what’s called the CPM basis, which is cost per thousand impressions and we work off of a fixed thirty day rate.
Andrew: I see. Regardless of how many ads are served up, if the publisher has a bad month or a great month, he still knows exactly how much he’s going to get paid. That’s the difference.
Interviewee: Exactly
Andrew: “The Deck” operates in a similar way, am I right?
Interviewee: “The Deck”, I guess backs into a number of impressions that they are selling and it’s a little more ambiguous in terms of, you can’t chose the sites that you want to advertise on. You kind of get that all or nothing bundle.
The Deck is awesome
Andrew: How did you start selling ads yourself when you were running “CSS Elite” and “13 Styles”?
Interviewee: What happened at first was that advertisers would just send me an email. I had an advertise page that said “Contact Me” They’d write me an email that said “I would like to get an ad for a month” and “Can I have a discount”. We went through this negotiation back-and-forth.
Interviewee: you know, probably six or seven emails exchanged before we closed the deal. That type of process.
Andrew: So they were just finding you, it’s not that you were working the phones. It’s not that you had an “in” with advertisers. No, you just had a sponsor me and people clicked and started contacting you.
Interviewee: Exactly.
Andrew: Okay, now you don’t have much experience selling ads. Why do you decide to get into buysellads.com? Into a business where you are essentially going to be selling ads for lots of other sites?
Interviewee: That’s a great question. It’s always challenging whenever I’m out at dinner with my wife and someone says, “oh, what do you do?” You say, “well, I sell ads.” Of course the immediate look I get, the reaction is that I’m some kind of snake oil salesman. Something like that, because ads are evil, and everybody hates ads. So the problem I was trying to solve with buysellads wasn’t how to get on the phone and sell ads, and how to position yourself to advertise. it was how can I allow advertisers who are already advertising on all of these websites… How can I make them more efficient? And at the same time, How can I make the publishers who are selling ads more efficient, because their time is better spent producing new content versus dealing with advertisers. So that was kind of the original goal of the software, and it remains the core goal today. It’s just to make the transaction happen smoother and quicker.
Andrew: I see, so initially you weren’t going to get advertisers or these publishers, you were just going to make it easier for advertisers who already wanted to sponsor the sites to interact and make sure that they’d get paid and just streamline the whole process. Is that right?
Interviewee: Exactly. And then what happened from that, was that really savvy advertiser, who are very in tune with their community, they knew all the sites they wanted to advertise on, but the ones that weren’t as savvy, they didn’t know where to look in the right places, so at this point in our life cycle, buysellads kind of fills that void for them. Where they can come there and they can see how all these sites compare with one another. Since they might not be as familiar with the community. So from that perspective it helps drive the sales as well.
Andrew: So are you saying then, that you started off just creating a way to simplify the as buying process for publishers then what you started to do was show other advertisers how each of your publishers performed, and allowed them to buy ads off those publishers sites?
Interviewee: Well, no. I think we just made the discovery of those sites a lot easier.
Andrew: Okay, how did you do that?
Interviewee: Because they’re all in one place, right? If you’re promoting a product that has to do with adobe photoshop, you’re going to find a ton of great sites at buysellads.
Andrew: How much of your original idea was to do that? To bring in new advertisers by being this marketplace? And how much was it just to create a software platform that was going to make it easier for publishers and advertisers to interact?
Interviewee: I think the platform comes first in making that transaction easier and then the second piece of bringing in more advertisers just kind of happens naturally. And kind of where we are right now in the design space because we are kind of snowballing and getting more and more design sites. The new advertiser piece has just really started to happen naturally. Were definitely out there more so now that we were before, whether it be pitching new advertisers of helping on board advertisers that are interested. But for the most part were an extremely small company, right? Were four people full time, and three part time. We don’t have a sales team that’s hitting the phones all day trying to convince people to spend money. The advertisers are spending money because they are making that decision on their own. So, it’s a much different sale.
Andrew: What is your sale process like? How do you discover advertisers?
Interviewee: A lot of the advertiser discovery we do do, might be through, for example, LinkedIn, or stalking people online on twitter or something like that. But to be honest, our close rate on our outbound cold calling for new advertisers is pretty low. And most of it has just been through the viral nature of the site itself. The publishers are selling Ad Co. that says advertise here and then everything kind of spreads. Lets say an advertiser comes in through one site and then they discover ten other sites and it all mixes in together. And everything funnels down back into buysellads.
Andrew: How did you get the original publishers?
Interviewee: I just shot out some emails. Through CSS Elite and thirteen styles I had made some friends, and I just sent around some links and said, “Hey, try this out, I’d love to see if it works for you” and luckily it worked for them. It definitely wasn’t this grand idea at first. I remember telling my wife, “Oh, this would be great if I could earn an extra @2000 dollars a month from this.” or something like that.
Andrew: What was the proposition you made to the first people you emailed about buysellads? The guys who you met through CSS Elite and Thirteen Styles?
Only from minute 15 to minute 20
For this HIT, the person conducting the interview is “Andrew.” The remote respondent can be labled “interviewee.”
Andrew:The guys who you met through CSS Elite and thirteen styles.
Interviewee: Yeah, you know it was interesting because what I quickly discovered after launching BuySell Ads, it that I actually didn’t have to propose too much more than making their life a little bit easier through automating their ads sales, and that turned out to be a very big problem that people really needed solved. Which was actually quite surprising to me. It was surprising to find out that I wasn’t the only one with that problem.
Andrew: And what were you charging them?
Interviewee: So we charged a flat commission rate of 25 percent. The publisher gets exactly 75 percent. Of course within our 25 percent, is the credit transaction fees, and the cost of running our business. So its not a direct 25 percent to us but it works out well, its a good split.
Andrew: I see, so you are going to take 25 percent, for giving them the software that would automate the sale process, you’re going to take 25 percent for charging credit cards and for processing payments to them. What else are you going to do for them for that 25 percent?
Interviewee: It’s all the support. It’s all of the questions that an advertiser might have at 1 am on a Saturday night or whatever it might be.
Andrew: I see.
Interviewee: We’re pretty active. We maintain our business very well.
Andrew: You know what? A young site that has a hundred thousand viewers, and is bringing in maybe a thousand dollars a month, a hundred thousand impressions, and is bringing in a thousand dollars a month, doesn’t want to reduce his burden. There’s not that much burden involved in maintaining a thousand bucks a month. I imagine what he wants is to increase his revenue, no?
Interviewee: Well I mean yea, you could totally argue that, for a site on the web, design to develop a space, or IPhone app review site space right now, if they’re not using BuySellAds, they are doing them selves a disservice. I truly believe that.
Andrew: Why? I mean lets talk back then. You got a guy, he’s got a website, a blog, that’s doing a hundred thousand impressions a month, he’s bringing in a thousand bucks on his own, he’s not saying my pain point is that I have to talk too many advertisers. He barely has any advertisers, his pain point is how do I increase my revenue, without spending all day long trying to find advertisers.
Interviewee: For that you could say, okay if it takes you an hour per week, or more fairly a couple hours per week to manage these advertiser emails, or any requests or anything like that, how many extra blog articles could you write in that same amount of time? And how much is each one of those articles worth to you? If it’s worth more than the cost of the cost it is to pay us to handle that for you, than its worth off loading your adsales.
Andrew: Did you have to make that clear them or was it so clear to them that as soon as you offered it to reduce the work involved in processing ads, that they said ahh yea Todd, yea take this over, I’ll be able to blog more. How did it occur to them?
Interviewee: I think a lot a people didn’t want to deal with advertisers. It’s not like advertisers are a pain, we enjoy working with them every day, but people didn’t want to spend that time doing that. So that where they came to us to get that automated.
Andrew: Okay so how did you get the original advertisers? It was all the sites?
Interviewee: Yea I mean it was basically all the sites, CSS Elite had a few, one has been with us since the beginning is Fresh Books. They were advertising CSS Elite and they just naturally came through the BuySellAds funnel there. That and actually advertisers refer other advertisers all the time.
Andrew: I was going to ask something and then I got distracted by the chatboards, lets see what they are saying. Moses seems to have a strict approval process, ie that infographic, oh they are looking at the infographic on your website. There’s something about infographics that people just pass them around, you get sucked into the information on them. How did you get that infographic made by the way?
Interviewee: One of the guys on our team actually, Cattlemen, him and Anka, kinda created the idea around the graphic, and then we had an outside guy design it for us.
Andrew: How did you find the outside guy to design it for you?
Interviewee: He had do a couple of other infographics. There was one really nice one on Fedex I think. He has a website, I don’t have it off the top of my head.
Andrew: I see, you guys just saw his name on the bottom of someone else’s infographic and you hired him to do yours.
Interviewee: Yes exactly.
Andrew: I see yea, those things are incredibly viral. The infographic for people who want to see it for them selves is on the blog at BuySellAds.com. And its just a way of visually showing how big the company got in the last, how old are you guys now? Two years, three years old?
Interviewee: Two years.
Andrew: Two years old. Okay can you talk a little bit about the audience that you had that helped you build this new business? I have been noticing a lot in my interviews that entrepreneurs that have an audience before they start a company, have a ready made pool of customers and supports for their new business. And it just becomes easier to build a business with that support group.
(this comes a bit after the 20th minute but part of Andrew): what was it like for you?
Interviewee: Programming. And, you know, the site just wasn’t getting the proper attention. That, and I won’t lie. Like, the, you know, working til like, 3 AM gets really old after a while. And I just didn’t want to do that anymore. You know? I wanted to do this full-time, during the day.
Andrew: You said that the revenue that you’re making with BuySell Ads and the salary you took from Hubspot were even. Did you mean the profit from BuySell Ads and the salary from Hubspot?
Interviewee: Yeah, the profit from BuySell Ads.
Andrew: Okay. So, naturally the revenue would have been a lot more, I just wanted to see if it- So it seems like it became like a job. You were making as much money as you were at the job. How many hours were you spending on the job and how many hours were you spending on BuySell Ads?
Interviewer: Yeah, I think in that respect I wasn’t very fair to my job at Hubspot. When I was there, I was focused on what I was doing. I always delivered. And I felt like I performed very well at Hubspot. And what’s interesting about BuySell Ads is that it actually didn’t take a ton of time to run, because I knew that for that one hour I had before going into Hubspot in the morning, or those two hours I had at night before going to bed, that I only had a certain amount of time to get stuff done, and from that perspective I became incredibly efficient in making sure that BuySell Ads was well-maintained.
Andrew: Who was that first person that you hired? How’d you find him?
Interviewee: Yeah, that’s a great story actually. His name is Nathan, and he was writing articles for a website that we were selling ads on. And I remember, I was looking, trying to figure out how to do something coding one night, and I came across an article he had written, and I was like, ‘Wait, if I’m reading about this guy teaching me how to do stuff, why don’t I try to hire him?’ And I found out he was freelancing and stuff like that. And so I just sent him an email. We got connected. And the funniest part is that maybe about a month after we started working together, he caught me on IM and he said, ‘You know, Todd, I really need to talk to you about something.’ Like, ‘Oh, geez, here we go.’ And he said, ‘I want you to know that I’m only seventeen years old. I hope that’s okay with you.’ And I was like, ‘Are you kidding me? That’s awesome. First of all, you sold me as if you were someone who’s been doing this for years. Which, judging by the quality of work, you definitely have been. And it doesn’t really matter that you’re seventeen. You’re kicking ass, right. You’re doing a great job.’ And so then, about six months later, he came on full time.
Andrew: How many people do you have now?
Interviewee: So we’ve got seven. There’s four of us that are full time, so myself, Nathan, Anka and Sergio. And then we have Matthew, John, and Caitlyn working part time. So that’s seven total.
Andrew: Nathan now is working full time? He must be eighteen years old. I guess he’s not going to college.
Interviewee: I definitely think he has plans to do that.
Andrew: But now he’s working full time for you, and at some point he wants to go back to school, back to college. Okay, let’s have a look here and see if there’s anything else about the business I want to cover. Let’s see… the audience is saying… is there a huge community around BuySell Ads that that’s a big plus, Caitlyn seems to be saying.
Interviewee: Yeah, I definitely think that people, people support us. And we’re very fortunate in that respect.
Andrew: What kind of community? What are we talking about? How can a site like yours even have a community?
Interviewee: Yeah, you know, that’s a great question. You’re selling ads, it’s like… Well, I think it’s because we treat people the way they want to be treated, right? You know, when they email it in, there’s a good chance that they’re gonna get an answer directly from me in support.
Andrew: If somebody goes to support, and sends an email, you’re going to respond to that email? Still?
Interviewee: Yeah, I mean, I still respond to about fifty percent of our support emails.
Andrew: And how soon do you respond to email?
Interviewee: Well, the stat over the last year was within six hours. You know, depending on how tough it is. Could be a day. Could be thiry minutes.
Andrew: Somebody in our audience try that? I know I’ve got you here, for the next, I don’t know how long, half hour or so. I’d love to see if somebody would try that. Let’s see if we can get a response and find out how long it takes.
Interviewee: Challenge us.
Andrew: Challenge them. Challenge BuySell Ads. Also if you’re listening to this on tape delay (is that the name we’re going to give this?)… if you’re listening to the tape version, try it and send me an email and let me know. Don’t ask a jerky question cause I gotta believe they’re going to delete those. But if you have a real question, ask it and let me know how fast the response comes. Okay, let’s see where we were. Let’s go on to the audience. Let’s find out… actually, no. One more question about community. Physically, where is this community. Are we talking about a b board where people are talking to each other? A community that just kind of exists where people talk to each other privately by email? Is there something else they use?
Interviewee: Yeah, I mean we don’t really have one centralized place. Definitely we are very active on Twitter, and have recently been active on Facebook. But overall I think it generally exists in the blogs and on the sites that sell ads. So, you know, we get a lot of people who are very nice an write reviews of us all the time.
Andrew: Ok. Do they get affiliate commissions when they write a review and somebody becomes a user and a publisher.
Interviewee: No, we don’t have an affiliate program yet.
Andrew: Alright, so lets start this way. New site in the audience, somebody is listening to us and says, you know I want to sell advertising, where do I even start?
Interviewee: Sure. The first thing is you have to have some kind of quality content or you need content that attracts the types of visitors and the volume of visitors that it takes to sell ads. Its actually, its not easy to create a really powerful and unique blog, its hard work. So that’s the first thing, its not plug and play, its not like adsense where you just plug it in there and your making money. Its hard work.
Andrew: Ok, so find that one niche.
Interviewee: yep
Andrew: and it doesn’t have to be a blog even though we’ve been saying blog a lot we’ve been seeing Andrew S.G. in the audience and i know that he has style guide and style com question and answer site around style. He’s going to have the same issues and other people have different formats, but I’m saying find that niche. How do you know what niche to go after?
Interviewee: Well you know your passionate about it right, its just like, its no different as I started to buy and sell ads. I was passionate about what I was doing. That’s why its…
Andrew: Beyond that, how do you know its overdone and how do you know what the opportunity is and how do you know specifics and I don’t know I might be interested in all gadgets. If I have to pick a niche, how do I know the niche is the right one for me?
Interviewee: Yeah I mean I think you have to pick one that is very focused, like we actually have a lot of trouble selling ads on kinda general tech and gadget sites as the are not targeting one specific user. Right? You need a little bit more than buy/sell ads many times, and you’ve got to be knowledgeable in the subject first of all, right?
Andrew: Its true, but were all getting started. I mean were not all getting started, but when your getting started you can focus on lots of different areas to use the gadget example somebody using gadgets is just into the, well is in to the iPad and is into the Android and is into a billion other things. How does he figure out which of those gadgets to focus on? Wheres the money?
Interviewee: yeah. Well I mean there is definitely money into anything iPad, iPod, Apple, etc. Like, right, the iPhone app review sites were one of our biggest growing kinda categories in 2009. They came out of nowhere and made a good amount of money.
Andrew: How much?
Interviewee: How much? I think if you look at inventory and I mean its public you can actually see out inventory. A lot of them are making anywhere between three and seven thousand a month.
Andrew: For just, and ah, an iPhone review site.
Interviewee: yeah its like the bigger ones right?
Andrew: yeah
Interviewee: You mean they definitely have heavy traffic and they can, you know, sell those ads so…
Andrew: OK. so lets say they found their niche, they are passionate about it they are writing everyday, they are building up that audience and tweeting and facebooking, just bringing people in almost one at a time. They finally get to, what are we going to use as the minimum, 10 thousand right?
Interviewee: Sure, fair enough.
Andrew: OK. Where do they get their first sponsor?
Interviewee: So believe it or not a lot of times you know can definitely start sooner if you look around you at roughly the same traffic group is advertising on their site, and reach out to those advertisers. Get some ads…
Andrew: When you say look around you, you mean go to those websites, and see who’s sponsoring them?
Interviewee: Yes, see what their doing. For example, when I had CSS elite it was back in the day of the CSS galleries like CSS remix, CSS Beauty, CSS Drive, there’s all these other sites and I’d go to those sites and see whats happening their and you kinda learn from everything that is around you, Right?
Andrew: Alright, that’s actually how I got the first sponsor at Mixergy. I wasn’t accepting sponsors for a long time, and then I listened to Gregory Galins Venture Voice, the podcast with entrepreneurs, and he was doing an ad for fresh books, and I thought, “you know what I could do an ad, I could do better ad than he does and call up fresh books and see if I could take him on as a sponsorship.” And we talked and sure enough he became the first sponsor at Mixergy.
Interviewee: Nice, did you talk to Mitch?
Andrew: Ah, yeah actually.
Interviewee: Mitch is a great guy.
Andrew: I think I still talk to Mitch a lot.
Interviewee: Nice.
Andrew: OK. So I see, look and see who’s sponsoring in other places, where else because you know what I have Discovered? A lot of people have what look like ads but are really affiliate programs, and you don’t want the affiliate programs, you want the guys who are paying CPM, you want the ones who are building relationships.
Andrew: Affiliate programmes. You want the guys who are paying CPM, you want the ones who are building relationships. Can we go to sites like yours and see who’s sponsoring related sites? Is there another way?
Interviewee: I mean you can definitely go through..[inaudible]..People do it all the time. I get emails about people complaining that they have been spammed from so and so and stuff like that. If you are a publisher in a specific niche you should be aware of what are the sites around you, right, and you kind of need to be part of that community and many times especially in the design space, a lot of these sites are all friends. They are sending each other traffic. They are commenting on other articles and stuff like that. They are all kind of working together to move this together.
Andrew: And the way you got your first sponsor was just by having a sponsor me link on your website? That just takes people to an an email address right, or to a form that triggers an email.
Interviewee: Yeah. I just let it go straight to an email address and I think in its most simplest form that is how you can start getting people to advertise on your site. You know, throw up a link that says advertise here as part of your main navigation or something. See what happens, you know. Keep it classy. That’s my only advice.
Andrew: What do you mean? What are some mistakes that people have made?
Interviewee: Well, I mean, you mentioned affiliate ads. Right. It is true for something like Google Adsense that generate a ton of traffic in your trying to build up that readership and get those people to follow your site. Don’t load your site with all these crappy, don’t put a huge Adsense block right at the beginning of your article. Don’t put ten affiliate ads right on the side, because what that tells your users right there is that you are trying to make money from them. And, you know, while it’s an OK thing to do, don’t get me wrong, when you are first starting up, that is the wrong message to send to people who are consuming your content and helping you build up your site.
Andrew: I see. Should you though start with either Google or an Affiliate Programme, where in both cases you don’t have to make a sale; you just go and take some code, put it on your website and you’re good to go?
Interviewee: Well, yeah. I mean, let’s say example Freshbooks has an affiliate programme. Companies like Mail chip,I’m sure like Roofer and Grasshopper do too. Stuff like that. I would say use affiliate programmes for products that you use and products that you think your visitors would want to use. In the affiliate world – I am not trying to dis the affiliate world – but there’s lot of spammy and junk offers out there and you don’t want to have those, kind of, downgrading the value of your site. Right.
Andrew: I see. I know. In those early days when you are desperate for revenue it’s tempting to start putting ads everywhere and to take crappy affiliate programmes just because they’re going to bring in revenue. What you are saying is, when you have that on your site it’s hard to graduate to the next level and bring in those sponsored deals that we are talking about here.
Interviewee: Yeah. Exactly. Even when you get to that point where you can start charging people for ads, you still have to turn away the ads that aren’t right for your site. I mean, we turn away on a given month probably $20,000 worth of new ads because they are just not right. It’s hard to do that, but you have to do that if you want to maintain high quality and kind of send the right message to your visitors.
Andrew: What kind of ads are you sending away?
Interviewee: I mean there is a lot of like Malware ads that are going around like win a free IPad or win a free IPbone from MacBook Pro…[inaudible]…the cartoon face. If you went to some sites in our inventory right now you probably might find a few of those ads, but it’s something we filter out. [broken/inaudible].. So three months ago we might [inaudible]…now we are, so we are getting rid of them. Anything that is not good for [inaudible] we are trying to get rid of it.
Andrew: Do you guys have an approval process before an ad runs on your network?
Andrew: Yes. So right now what happens, when someone buys an ad is that we get an email, and at the same time the publisher gets an email, and they can either approve or deny the ad. In certain situations we will override whether they approve or deny. In most cases to deny after they had accepted if its either fraudulent or if it’s, you know, some kind of Malware or something like that.
Andrew: What kind of CPM’s would a gadget site get these days?
Interviewee: Gadget sites. You know if I could stretch that to be like an I-phone app review site?
Andrew: How many dollars per thousand would they get?
Interview: Yeah. I mean, I think you can get anywhere between, I’m going to say like 2.00 to 3.50 maybe, depending on the site placement, stuff like that. The other thing you have to consider too is that, you know, if you are four small [inaudible] twenty-five, twenty-fives together I would counting that as one unit. So I would combine all those CPM’s, because that’s how the traditional networks do it.
Andrew: All right. That brings me to another question. In starting out how much do you charge?
Intervewee: That’s a great question. The first thing you should do is actually look through our inventory, And see what those sites around you are charging. If they are not part of buy sell ads, go to their advertise page, see if they’ll share with you. See if you’ll find out. I think, you know, when you look at those sites and you see how much they are charging and how full their ad zones are, you’ll have a pretty good idea of whether they’re charging the right amount.
Interviewer: I see, okay, so if I were going to start an iPad website, and iPad review site. I might go to buy sell ads and see what your iPod or iPhone review sites are earning per thousand and then price around there.
Interviewee: exactly, exactly
Interviewer: Okay, alright. What about when it’s time to increase, how do you do that.
Interviewee: Sure, so that’s a very delicate process. Anytime you change anything, on an advertiser, it’s friction. When you’re selling ads you want to reduce the amount of friction as much as possible. And so one thing we typically do is we say. Okay, well lets try to sell some ads, okay lets say you’re selling ads for a hundred dollars and you want to increase to one fifty. You say okay, you’ve got one spot available. Lets try and sell that one spot that’s available for one fifty. One we sell that, then lets increase one of your other advertisers. Okay, once they approve, then we increase the other advertiser. Lets say they deny it. Okay so now we have that empty spot but sell that again at one fifty no once it’s full again we’ll go to the next advertiser. and work it like that
Interviewer: Yeah, but assuming you have four ads, you could have two sponsors who are paying less then the other two sponsors. That’s another form of friction or it just doesn’t feel right.
Interviewee: Yeah well I mean the other thing too is that, you know, once you commit to changing a price you need to do it for everybody there. Part of the value of the network buy sell ads is that all the information is transparent to all the advertisers.
Andrew: What about other countries? Are you guys in other countries yet?
Garland: I mean, you know, we buy slods alone, like our publisher spans in many different countries you can say we’re in other countries.
We’re not localized in any different languages. It’s definately something we think about often, and think about a lot.
It’s, it’s very tempting. I think we, we still have enough work to do right here even within web design development, you know, in kind of tech oriented sites.
We’re not going to stray that far just yet. I think, you know, it’s definately… (audio broken)
Andrew: Ok, let’s see, what about placement. How do you know where to place the ads?
Garland: Yeah, I mean my best advice is to just let them breathe, right? I mean, you know don’t cram like twenty ads into this one spot or something crazy like that.
And of course, you know, higher end orgs like the deck would argue that you know that we put too many ads in out placements.
Andrew: Coz they do only one ad in per sentence.
Garland: Exactly, exactly coz they only have one ad per site. But you know, still, just, you know, that top right placement, the leader board, you know, in post under title as annoying as it may be it still commands a great amount of money and of course the standard one twenty five on one twenty five sound directs, great side.
Andrew: What’s the most effective out of all those?
Garland: In post under title by far.
Andrew: Now that’s the most distracting.
Garland: Yeah I know it’s, it’s sad but true. And you know, I don’t feel like I should add that position until they have a ton of traffic.
Andrew: Why? I would feel like they would want to do it early on before they get a ton of traffic just to maximize the traffic that they have now.
Garland: I guess it depends on what their priority is right if they’re just trying to make the most money from their site, go for it.
If they’re trying to build up their community and kind of cash in on the other side then wait, so.
Andrew: Ok. Let’s see, be part of an ad network, now why should somebody be part of an ad network? Why not just go off on their own?
Garland: Sure. I think, you know, something like buy sell ads it adds a lot it adds process and it adds credibility.
The advertisers are confortable working with us, they know that if they’ve worked with us before that they’re going to get what they paid for.
You know, it’s, it, they’re familiar with the process. If someone wants to sides on their own I think it’s fine too.
I would say, you know, go for it, try it out, if it doesn’t work then, then try a network, you know.
Andrew: Does it makes sense I see male chimp on lots of sites? Does it make sense for me if I was a new, if I was a new site to just call up male chimp and say hey I hear you guys advertising everywhere what’s it gonna take to get you at, to try out my site?
Garland: So, with a company like male chimp I’d say no, it doesn’t make sense, because they don’t have the bandwidth to be dealing with, and now I’m not trying to say they can’t and what I’m just saying like they, they don’t wanna deal with fifty different publishers, right?
Just, just think how, how many, how much that complicates what they’re trying to accomplish, you know. For a company like that they’re gonna go through buy sell ads because we make them more efficient, right? Accounting department sees it coming through, it’s just normal, it’s just of the process, so.
Andrew: Yeah, I can imagine all the headaches involved in that, because it takes forever for a smaller site to send out invoices, to collect payment to go back and forth on the traffic and, and everything else. I could see why they’d wanna do that. Let’s see what else we’ve got here.
Had an increase rate, what else do you think we should talk about. What are some big mistakes that the publishers make?
Garland: So, big mistakes I would say, getting too greedy, you know? Jacking the prices up when you should kind of be patient and kind of you know and enjoy that recurrent revenue that’s there. I think another big mistake, let’s see, not, not, you know, not keeping, kind of, your post frequency going. I think a lot of the sites thrive of off a lot of social traffic and you know, kind of, the, you know, continuously publishing like people are always hungry for new articles and so you gonna have to keep that frequency up and keep publishing new stuff that will keep people coming back, so.
Andrew: You know, I don’t know what it… Well, the frequency really matters a lot more than I ever realized. If you just are consistant, every day you publish something, every day there’s something new on your site it increases traffic, way more than… if you publish five times a week versus one time a week you’re publishing five times as many posts every week but your traffic will grow more than five times, because I guess people start to depend on the site, they start to take it seriously.
I remember when I talked to Ben Had, the guy who runs the cheese burger network, icon has cheese burger and fail belonging the others…
Andrew: and the others, and I asked him what were the first things that you did when you bought this company and he said I took it to a dependable, consistent, publishing schedule and that way people knew what to expect from us and they knew that they could keep coming back and getting more from us. Let’s see, Robert asked earlier, what’s the best way for me to add advertising to my site. I guess what he is meaning is where should he put it?
Interviewee: It depends on the site layout, but traditionally, it’s kind of the right side bars at the right place. I don’t want to tell people not to be creative with where they put their ads. But you know, keep it clean, right. Let them breathe. I must sound like a broken record, but it’s like these things just work. Quality content. Let the ads breathe and, you know, don’t put too many advertisements there. It works.
Andrew: Do you have any advice for increasing CPM’s on the mobile web?
Interviewee: You know, to be honest, we don’t have any experience with mobile yet. It is something I would love to do this year, but right now we are busy solving other problems. But we’ll get there, I’m sure.
Andrew: Where do you guys advertise?
Interviewee: You know, we actually we don’t have any active ads running right now. We have little ads running, it’s minimal, maybe, only about $50 per month. You know, our users advertise for us, right. They praise the company. We are committed to doing hard work for them and they reward us in that regard. We are very lucky.
Andrew: I got a question here from Reuben of BizSketch. He sent the question over before we started. Basically he’s got his banner and he is asking for feedback on how he can improve this ad that he runs. What I would like to do is, because Reuben is a guy who just keeps asking questions, and I love getting questions from the audience, I want to give him as much help as possible, I want to help anyone who works as hard as he does on his site and also supportive of the work that I do here. Can I show you his ad after the interview, get your feedback and then post it on the site with this interview?
Interviewee: Oh yeah. Most definitely.
Andrew: We’ll make it kind of bonus material for people.
Interviewee: Sure.
Andrew: All right. In general though, if somebody has an ad and they want to know how to improve it, what do you tell them?
Interviewee: Well, I mean, try AB testing. See what works better. I mean a great example is, I was giving Fotolia some advice on some ads that they were doing. I said you know I think this one is going to work best and so they did all of this new creating, they mixed it in with their current ads and it turns out that the ad they already had running did better than the one that I said would do best. In some ways, you know, you just have to test it out and see what works. Try different colours. Try less text on the end. Try sending to different landing pages on your site and see what converts better. I mean there’s a ton of stuff that you can do.
Andrew: I get that. Where do you get the ideas though, that you’re going to test? I could understand change from one colour to the other, that would occur to me pretty easily, but I want to come up with tests that make sense, that would work for other people. Where can I find examples of that?
Interviewee: There is, I came across this site AB testing, I don’t know if it is dot org or dot com, but it’s a site that some guys are running from …[inaudible}…, and I think there is a lot of open data there. Unfortunately, we do not have all that data that we’ve opened data because our viewpoint is that the advertisers pay for it and they own that data. So, unfortunately I do not have anything directly to share.
Andrew: Okay. I’d love to hear, maybe from the audience if they have any recommendations of where we can go to find out what worked for other people so that we can try their ideas on our advertising. If you guys have any suggestions come back to the site and give them to me and give them to the other readers on Mixergy. All right. Oh wait! It’s Dano Menion is saying that it’s ABtests.com, plural.
Interviewee: Perfect. Thanks Dana.
Andrew: Any last bit of advice for people who are building websites?
Interviewee: Yeah. I mean, when it comes to selling ads, you know, just keep it simple. Don’t make it too hard on advertisers to make a decision. Have a few options. Make it very clear and make it easier for them to buy. That’s all you need to do.
Andrew: Right. As a listener and viewer of Mixergy, and an entrepreneur yourself, what would you like to see me do, more of, differently, suggestions; what would you like, what would help you?
Interviewee: Yeah, I mean honestly if you could just interview Jason Freud every week, I’d watch this show religiously. No I mean, like he is a great example of a guy that just has very sound, down to earth advice, and I mean stuff like that is priceless for guys like me. We feed of it.
Andrew: It seems that a lot of the way you built your business is based on his ideas.
I
Andrew: It seems like a lot of the way you build your business is based on his ideas. Whether you got it from him or not I don’t know but your methods are aligned.
Interviewee: Yeah I think I’ve read both of his books and a lot of the stuff he says is true. I think the most helpful thing for me that he’s given me through the stuff he’s written is confidence. Don’t be scared of the big guys. You don’t need to be featured on TechCrunch to be successful, stuff like that. All you need to do is focus on creating awesome value for your users, being profitable, and things will probably work out. Just focus on what works for you. It’s really easy as someone running a business for the first time to get hung up on stuff like that. Like oh man, I didn’t win this award, or TechCrunch wouldn’t write an article about me, or oh no, this competitor just got 5 million dollars in funding, my whole world’s going to end. It’s really easy to let those things, those road bumps along the way, it’s really easy to lose sleep and stuff like that, but you kind of have to look past that and focus on solving the problem your users need solved.
Andrew: Who else is out there, like Jason Fried, whose opinions and ideas you respect?
Interviewee: Definitely Darmesh’s, Darmesh’s cofounder Brian. I worked for those guys for two years, I look up to them a lot. I’m not as close to them now as I was when I worked there, but when I was there I felt like the advice they gave internally for the company was very sound and very reasonable.
Andrew: What kind of advice did they give you? I did an interview with Darmesh but I’d like to do another one, I have a lot of respect for him as an entrepreneur and as an angel investor. He knows his stuff. What should I be asking him?
Interviewee: I think with Darmesh, I think what’s special about him, is he doesn’t stop people from letting them realize their own ideas. The company culture there is unique in that sense, that anybody can become a star if they want to be. It’s kind of like being an entrepreneur. It’s up to you.
Andrew: How did you do that at his company?
Interviewee: The stuff I was working on there I was just passionate about. And they didn’t stop me from working on stuff that I wanted to work on. It was like technical SEO at the time. It was like designing the interface for their app, optimizing some javascript, stuff like that, they let me work on stuff that would help make the company better.
Andrew: But everyone wants their employees to work on stuff that makes their company better. How did they do it differently with you?
Interviewee: They didn’t have any red tape. When you’re in a meeting your voice is heard. If you have something smart to say they’ll hear it. There’s no red tape, no bureaucracy, no BS.
Andrew: Why don’t they own BuySellAds.com? You built it while you were working for them. Isn’t there a chance they’ll say hey these are our ideas, we own the business?
Interviewee: That’s a great question you know before I signed on with them full-time I had buyselladsin the contract. At the time it was called something different but it was the same idea. Obviously I thought about this. We don’t really have any IP with the actual product, and the current product that’s live right now was completely rewritten after I left there and so there’s nothing really similar to what they were doing.
Andrew: But they knew up front you’re building this, it’s yours, it’s on the side?
Interviewee: They knew I was a risk when I first started, I’m pretty sure of that.
Andrew: I’m sorry, what did you say when you first started?
Interviewee: It was pretty clear that they knew I was a risk to leave when I first started.
Andrew: Ok and his cofounder – I actually don’t know his cofounder, what’s he like?
Interviewee: Oh he’s cool, he’s cool, he’s the type of guy you can go to the bar have a beer with and have an honest conversation. They’re both like that. They’re approachable. I think that’s important for cofounders.
Andrew: Alright well if there’s anyone else you can think of later shoot me an email, I’d love to interview more of the people who have influenced you. I want to thank you for doing this interview, I want to thank you even beyond this. You mentioned Jason Fried. I had an issue a while back. Jason Fried sent me an email just to encourage me to continue. It’s kind of interesting how apart from when the cameras are on certain people and apart from the persona they have in public they’re genuine good people in private too. There was no talk of you coming here and doing and interview or me doing anything for you, when you and I first met. You just said, hey Andrew I see you’re selling ads, let me see if I can help you, you gave me advice on how I can adjust my advertising, I’m really grateful to you for doing that, that stuff you do in private it just says a lot about who you are. so thank you for doing that, thank you for doing this interview, thank you for answering the question from Bitzkitch after this interview, I’m glad to know you and I hope I get to meet you in person.
Interviewee: Yeah thanks Andrew, thanks for having me on this interview.
It’s an honor to be interviewed next to that long list of people there. So, I’m grateful for that. Anytime! I’m always open; and it’s the same way with all your users too. They can contact me any time. So.
Andrew: Right now in our audience there is someone who is in the position that you were about two years ago. They are building this thing on the side. Maybe just like you, they don’t have all the expertise, because they didn’t go to business school. They know design better than they know sales or they know programming better than they know how to use Excel or how to use QuickBooks. Don’t know what kind of hangups we have in our heads. I love when I get people like you here to say “Hey you know what, all those little issues are little in comparison to just having the idea and executing.” And I love when you come here and you share those ideas and just show them just how you did it, and you give them ideas that will help them build their business. So wherever you are, in two years, or however long it takes you, come back do what Todd did, do an interview here on Mitch and Jim. Looking forward to hearing your story. Todd, thank you.
Interviewee: Yes. Just do it.
Andrew: Yes. All right. Do it and tell me and tell Todd. Absolutely. Thank you guys. I’ll see you in the comments.
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