There are at least two ways in which sites can make money:
Selling Goods and Services
I shall deal with the second case, “Selling goods and services”, in another article. In this article, I will address the issue of how your site can actually make money from advertising.
Making Money From Advertising
If you look at many websites, you will probably notice that there are banner advertisements displayed on most pages. If you are a newcomer to the scene, you might think that you must either be a company or that your site must be famous before you can get advertisers, just as it is the case in hardcopy publications.
In reality, anyone with a website can get advertisers. While it is true that if your site is well-known, you may get companies contacting you to offer to advertise on your site, you can get advertising revenue even if you are just starting out and your site is relatively unknown.
The way to do this is to join as an “affiliate” of various companies or sites, either directly, or through an affiliate network. An affiliate network is simply an intermediary with whom you can sign up to get advertisers (as opposed to dealing with individual companies separately).
Before joining any program, you should probably be aware of the different payment schemes available.
Pay Per Impression (CPM)
Here, you are paid according to the number of times the advertiser’s banner is displayed on your site. The amount you earn is typically calculated based on the number of thousand impressions of the banner (impressions = number of times the banner is displayed), often abbreviated CPM (cost per thousand, with the M being the Latin numeral for thousand). That is, $5 CPM means that you get paid $5 for 1,000 displays of the banner. In general, the amount paid is usually small, but it is easy to earn since everytime a visitor loads the page, you earn. This is known as a “high conversion rate”. Needless to say, this method will allow you to automatically earn more if your site attracts a lot of visitors.
Pay Per Click (PPC)
When you are paid per click, you are only paid when visitors click the advertiser’s banner on your site. The amount paid is usually higher than the pay per impression scheme. Whether you get a high conversion rate here depends on the banner (whether it attracts people to click it), although in general, it has a higher conversion rate than the pay per sale method. A high traffic site will probably enjoy a higher click rate than a lower traffic site, although you will probably get better results if your banners are carefully selected to suit the target audience of your site.
Pay Per Sale or Lead (sometimes referred to as Cost Per Action, or CPA)
While you will probably get the highest payment rates with this method, it has the lowest conversion rate of the three schemes. You will only earn if your visitors click through the banner and either purchase an item from the advertiser or take some other prescribed action (eg, sign up for a service). Like the Pay Per Click method, you get much better results if you carefully select your advertisers to suit the target audience of your site.
In general, to avoid wasting resources in issuing cheques for very small amounts, advertisers will usually accrue the amount owing to you until it reaches a certain level (such as $25) before they pay you.
Where to Find Affiliate Programs
You can find a list of affiliate programs and affiliate networks on thefreecountry.com’s Affiliate Program page at http://www.thefreecountry.com/webmaster/affiliate.shtml
To join an affiliate network or program, simply go to the site and complete their online application form. Some programs will give you instant approval while others require a human to check out your application before it is approved. Once it is approved, you’ll be given some HTML code which you can cut and paste into your web page. Note that some affiliate networks and programs will not accept you unless you have your own domain name. If you are planning to earn from your site, you should seriously consider registering your own domain name.
How To Choose An Affiliate Program
How should you choose an affiliate program? My suggestion is not to choose a program according to the payment scheme, but rather according to the kind of people who are likely to visit your website. For example, if you are targeting parents on your site, links to affiliates with educational software, books and the like may generate more revenue than banners that link to web hosting companies. The most important rule of choosing an affiliate program is to know your target audience.
Another point to consider is whether you really want to join every single affiliate program that comes your way. Some studies suggest that sites that make the most money from affiliate programs are affiliates of only a small handful of programs. Furthermore, concentrating your advertisements from one network may allow you to be paid faster. If you advertise for hundreds of different affiliate networks on your site, you may end up earning only (say) a few dollars per month from each network. If your advertiser’s minimum payment amount is higher than what you can earn each month, it may take you a long time before you accrue enough to be paid.
On the other hand, that formula does not necessarily hold true for every site (or every page on your site, for that matter). For example, if your site has a particular theme, and an affiliate network only supports one or two suitable advertisers, you might want to sign up for a few affiliate networks so as to get a greater number of relevant advertisers. After all, advertisements that are relevant to your audience are more effective than general advertisements. (What’s the point of putting banners from only one affiliate if nobody is going to click them?)
Automated Context-Sensitive Advertising
One of the latest trends in website sponsorship is to sign up with an advertising network like Google AdSense The advertising network automatically checks your web page and determines the most relevant advertisement for the page.
The theory is that you get advertisements targeted at the interests of your visitors without much effort from you. As mentioned earlier, targeted ads tend to result in better performance and returns. In practice though, you are ceding control of the advertisements that appear on your site with the occasional bad result. If your site is supposed to be family friendly like thesitewizard.com, you’ll probably still end up spending time weeding out undesirable advertisements by logging into the network’s system and blocking some adverts (“ads” in US English). This of course assumes that the advertising network gives you enough granularity of control. It also assumes that the offending advertisement happened to appear when you visited your site so that you actually know that it was used on your pages.
(In case you’re wondering what I’m talking about: the adverts shown tend to be different for every visitor, depending on the ads available at that time, his/her location in the world, and which sites he/she has visited in the past. As such, with this method, what you see may not be what your visitor sees, making it impossible for you to know for sure what is on your site for any particular visitor.)
Advertising revenue is one of the most effortless way to earn money from your site. You merely have to put the banner there and wait for the money to roll in. (Well, okay, not quite. You will still need to have some visitors first before you can make anything.)
Why wait? If you already have a website, let it earn even while you sleep (literally). Every day you let your site “idle” without advertising is a day of lost opportunity.
All the best in your endeavour! Remember also to check out my other article, Increasing Your Affiliate Program Income, for more tips on earning from your website, at http://www.thesitewizard.com/archive/moremoney.shtml.
Copyright 2000-2014 by Christopher Heng. All rights reserved.
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