If you're a Webmaster whose site receives even a modest amount of traffic, you've no doubt dreamed of the untold riches that lie untapped in your traffic stream. The burning question is: "How can I make the most money possible from my Website traffic?" This article will help you answer that question, as we explore several of the most common and profitable methods that are currently being employed to convert page views into dollars:
- Traditional banner advertising
- Pay-per-click (contextual) banner advertising
- Subscription revenue
- Affiliate and CPA programs
- Text links
Traditional Banner Advertising
One of the earliest and most prevalent forms of monetizing site traffic is the ubiquitous online banner. Originally most popular in the 468x60 pixel version, banners are now available in many different sizes and shapes. In fact, the Interactive Advertising Bureau now lists 16 standard ad units in its guidelines. It's not hard to find a site that uses banners: CNN displays a 728x90 banner at the top of the page, eBay uses a 468x60 banner spot at top of listings pages, and AOL displays banners of various sizes throughout the site.
Business Model and Mechanics
The basic business model of the banner is simple: the Website vendor sells page views (impressions) to the advertiser. There are 2 basic banner ad payment models: paying as you go for every thousand impressions delivered, and a flat fee that's charged regardless of the number of visitors who actually see the ad.
Under the pay-as-you-go model, the most common metric is cost-per-thousand (impressions), also known as CPM. Prices will vary depending on targeting, volume, term of commitment, and market forces. Typical CPMs for less targeted inventory can range from $0.25 to $5.00 per thousand impressions. Therefore, a media buyer who wishes to purchase 100,000 impressions at a $5 CPM will sign a contract for $5,000. Targeted impressions are worth much more to an advertiser. If your site attracts car enthusiasts who are an attractive demographic for a local or national car dealership, you can expect to command 10 times the rate of untargeted ad inventory. Typical CPMs for targeted inventory run between $10 to over $100 per thousand impressions.
It's also common for a site to charge a media buyer a flat fee for an advertising spot. Depending on the placement and traffic, the fees can be quite high. For instance, a fixed placement on the home page, in a prominent spot, with a 100% share of voice on a targeted site is quite desirable.
The advantage of running banner advertising on your site is that you may be able to get paid purely on the basis of page views, thereby monetizing all your available inventory. The drawback may be that not everyone is willing to pay simply to be seen: often, advertisers demand a response to the advertising. Media buyers may be looking for a per-click type of payment arrangement.
The main disadvantage of running banners on your site is probably the adoption of maintenance responsibilities for someone else's creative units, and the responsibility for a banner's performance even if the banner is poorly designed, or the advertiser's Website doesn't convert well.
To make real money from banner ads, it's essential that you have a clear idea of how many unique visitors visit your site, and how many page views they generate -- data that any decent Web analytics program will show. You then have a basis on which you can establish realistic expectations of how much money you might earn.
Next, decide where on your site you're going to display advertising banners. I would suggest testing ads both at the top and bottom of your pages -- this is a proven model that has worked well for large publishers. Once you've decided on ad placements, you should set up an ad server to display the banners, and keep track of pages views and click throughs. I would also suggest developing several banners that 'sell' the ad space, which can run when you have excess inventory. The banner might say something like, "See Your Ad Here -- Contact Us to Advertise," and link to your advertising rates page.
Once your ad server is set up, sell! This is a hurdle for many; we'll address it later in this article.
Pay-Per-Click (Contextual) Banner Advertising
With the emergence of Google's AdWords and AdSense programs, the business of pay-per-click banners has exploded. This type of ad unit offers the tantalizing combination of ease-of-use and payouts for each and every click, regardless of whether that visitor converts to sale or not. It's no wonder this unit is so popular with the likes of Slashdot, which shows PPC marketplace links on the right-hand side of the site's main categories and posts, and Go.com, which uses Yahoo! Search Sponsored Results to power its search function. And these are just two among many, many other sites.
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