Let us take a look at the main types of blog ads that generate profit for you, the blogger, and cost for the advertiser. We can distinguish 3 categories:
The advertiser pays the blogger each time an ad is clicked. It is the most common type of blog advertising. “Banner” ads are CPC advertisements.
The advertiser pays the blogger each time an ad is displayed. Among the online advertising strategies CPI is the one most similar to those used in mainstream media, e.g. in newspapers where advertisements’ cost are calculated in regard with readership.
The advertiser pays the blogger each time someone clicks an ad and then proceeds in making a purchase.
Certain issues are raised in response to the implementation these online advertising strategies.
CPC ads are prone to abuse through click fraud. That means advertising costs may increase dramatically because someone (for instance an unfair competitor) clicks the ad. As far as CPI is concerned certain actions like pressing the “refresh” button are detrimental to the strategy’s accuracy. There are no issues concerning CPO, but it obviously more difficult to make a profit from this type of advertising alone.
In general, major sites such as Google are dealing with these issues by certain modifications in their ad servers. It would not be though to keep them in mind in case your advertisers complain about unusually high costs for their blog ads.
It is up to you to discuss with potential advertisers on the preferred blog advertising strategy(s). Remember, your single most effective negotiating tool are your blog’s inbound traffic rates.