http://www.game-advertising-online.com/index.php

Advertising helped Google to stay up and running and now it’s helping other websites bring entertainment to the masses. game-advertising-online.com (GAO from here on) is helping internet games make more money by giving them exposure or an extra bit of income. The whole operation rests heavily on two principles that we have discussed in Networks class. The first is the idea of advertising to a target audience or people within a certain network, and the second is how to find the best price for the advertising service.

Google links advertisements to keyword searches, so advertisers pay for a word that their future customers might search for. With games, it is actually even easier to find a target audience. You want to show your advertisement to some one who likes games. If a person likes games, they will probably be playing them or reading about which ones to play. GAO pays sites with browser based games or discussion of games for a space to advertise other games. It builds a network of gaming sites around it and encourages them to point to each other, making more links and allowing gamers to explore.

To find a good price GAO uses a system based on cost per click, click through ratio, and cost per thousand clicks that is probably very similar to the system used by Google. The advertiser makes a banner and then places a bid for cost per click (these are typically around $0.05 but can be as high as $0.20). Click through ratio, CTR, is the percentage of impressions that result in a click. When the advertisement is new, its CTR is determined by showing the add 10,000 times and counting how many times it gets clicked. This allows a fair trial for every advertisement. An advertisement’s rating or CPM (cost per thousand impressions) is the product of its CPC, CTR, and 10 (this is the approximate price the advertiser will pay for a certain number of impressions). Advertisers can increase their ranking either by bidding more money or making their banners more attractive. So the higher the bid and the more often it is clicked, the higher its rating will be. GAO shows the highly rated sites most often because it leads to more advertisement clicks. Clicks mean that the consumers are getting a new game to play (or at least are somewhat interested), the game advertised is getting more players, and GAO is making money and passing some on to the sites that display its advertisements. So maximizing number of clicks maximizes benefit to people in every category.