This guest post by Matt Harzewski (a.k.a. “redwall_hp”) of Webmaster-Source, provider of daily tutorials, tips, roundups, and links for bloggers and designers alike.

What sort of ads does your blog have? Let me guess… It’s an odd combination of AdSense, Kontera, AdBrite, and other ad networks, which add clutter to your blog and straddle the border between “tolerable” and “That’s it, I’m installing AdBlock.” Sure, it’s easy to slap some JavaScript snippets into your template and be done with it, but it’s not the best way to handle things. If your blog is new, then you won’t have much choice but to go with AdSense. But as the site grows, you may find it limiting, as you may with most ad networks.

• The ads are often for spammy sites, or of otherwise low quality.
• Ad networks take a cut of the profit. AdSense doesn’t disclose their cut, though most networks range from 25%-50%. (It’s suspected that Google takes roughly a 20% cut.)
• With Pay-Per-Click networks, you’re depending on people clicking on the ads in order to get any money. This often leads to the ads becoming more intrusive than necessary as they must be placed inside content areas in order to achieve a descent click-through rate.
• PPC ad blocks, Kontera links (shudder), and other ad network units get in the way and clutter things up.

In contrast to network-based advertisements, you have what are called “direct-sale” ads. The general idea of direct ads is that you’re cutting the “middleman” out of the equation by selling ads directly to businesses instead of relying on a network.

This isn’t a passive solution, like AdSense, though. You have to actively seek-out businesses and ask them if they would be interested in advertising on your site. You can email companies that fit your blog’s topic, and you can post advertisements that you have ad space available (what a concept! ) on marketplaces such as SitePoint.

After nuking your network ads, you will hopefully have a nice, clean blog. The next step is to decide what ad formats you’ll offer, and where they will be positioned. A popular ad format among tech blogs is the 125×125 ad. It’s compact, it doesn’t look too “ad-like,” and people tend to look at them. You can also fit 4-6 of them in a fairly small space. I have a few on Webmaster-Source, and I like they way they’re noticeable, yet out of the way.

Then you have the classic 468×60 banner, which could be the oldest ad format on the internet. Designers Toolbox has a list of standard banner sizes, or if you have sizable enough traffic levels, you could invent your own custom format, like Smashing Magazine has done.

Put some dummy “Your Ad Here” images up where the ads will be, and link them to a static page with some site statistics (traffic, subscribers, any notes of interest) and contact information. Oh, and your rates, of course. Note how many ad slots are available, what formats they are, etc. How much should you charge? There isn’t a magic formula to calculate that, unfortunately. It depends on your niche, the age and traffic of the blog, the size and position of the ads, and probably other factors as well. You may find it useful to know that

• Bigger = more money. Charge more for a large banner than you would for a 125×125 button ad.
• Position is key. An ad is “better” if it’s above the fold (visible on screen without scrolling) than if it’s lower down.
• Less is more, quality over quantity. The more ads you have, the less they’re probably worth. If you have less ad slots (say four 125×125 ads and a banner rather than two standard banners, a 300 pixel wide square ad, and a “leaderboard” banner) they will have a higher value, theoretically. Also, you want to avoid having too many ads anyway. Otherwise you end up with a cluttered blog.

You’ll have to experiment with pricing. It helps if there are other blogs in your niche direct-selling ads. That way you can check their prices and traffic statistics, and factor them into your fuzzy math as you try to decide how much to charge.

Direct-sale ads aren’t new, as some may suspect. Back in the early days of the web, before there were any ad networks, that was how online advertising was done. Direct sales are a great way to monetize your website without looking like someone who has just discovered the wonders of Google AdSense. I’ve been selling direct ads on my blog for a few months now, and I’m seeing good results. If you want to learn even more about direct ad sales, I encourage you to read my post 125×125 Ads: Monetize Your Blog With the Bloggers’ Ad Format. Consider it your obligatory “further reading” section.