How to Make Money From Your Web Site

by Devanshu Mehta

Before I get in to this article, let me tell you a bit about myself- this will help you decide if you think my advice applies to your web site. There are many ways to make money off a web site and my methods have only permitted my web sites to pay for themselves. I run two blogs: this one and another one on film, “WideScreen Glory”:http://www.widescreenglory.com and I have run a large “Star Wars fan site”:http://www.galaxyfaraway.com since 1998, that makes up the bulk of traffic that I receive.

In a broad sense, there are three methods of advertising on the Internet:

  • *CPM* pays *per page view*. That is, if an ad has $0.40 CPM that means it will pay $0.40 per 1000 page views that the ad receives.
  • *CPC* pays *per click*. That is, if an ad has a CPC of $0.40 that means it will pay $0.40 per click by a visitor to the site.
  • *CPA* or *affiliate programs* pay *per action*. That is, if you buy anything from “Amazon”:http://associates.amazon.com/gp/associates/join/ using this link or AllPosters using this one, I will receive a percentage of the sale.


All three forms of advertising are useful; the best web sites will try to make use of all three. Of course, some may be more suitable for your web site and I hope to sort that out for you in this article. And before I get in to that, here is one more definition that will bring all of this together:

  • *eCPM* is *effective CPM*, which means the amount of money you effectively made for 1000 page views. So even if you have a CPM of $0.40 you may receive only $0.30 and the remaining may go to your ad supplier (e.g. Google). In that case, $0.30 is your eCPM. If you have a CPC campaign, but you earned $0.65 through it for your first 1000 ad views, then your eCPM for that campaign was $0.65. And finally, for an affiliate program, if you earned $1 in commisions on sales through Amazon after 1000 people saw the ad, your eCPM for that campaign will be $1. This is an extremely useful metric when comparing CPM campaigns with CPC campaigns, which would otherwise be apples and oranges.

CPM: Making Money off Traffic
FastClick (now ValueClick Media) is my main ad supplier and their main forte is CPM. They have competitive per page view rates (which, of course, vary based on what kind of site you have) which, for many web sites, should form the basis of their site income. CPM advertising is very convenient, in that it is easy to make a clear estimate of your site’s income (or potential income). If the CPM is $1 and you expect 100,000 page views for the month, your income will be $100. There is less volatility and a more clear chance of getting something for your efforts. It is also more satisfying in the short run to see clear results of improvements in traffic.

The downside of CPM is that until your site grows substantially, the rates available to you may be quite low. Also, ever since Google enterred the game, CPC has gained a lot of traction. Also, the quality of CPC ads has improved- and with Google, relevance to the web page- which actually has brought an increase in the number of people who actually click on ads.




CPC: The Google Way
After many years of being the second-class citizen of online advertising, Google sparked a resurgence in CPC campaigns. With their phenomenal index of web sites, Google serves CPC text ads targetted specificaly to the content on the page on which they are displayed. This leads to a very high click-percentage, resulting in high effective CPMs (eCPM).

Who actually clicks on these ads? Right, I asked that myself. Except that, provided things are working correctly, look at the Google ads on this page. Do they talk about stuff that I am talking about? Do they refer you to other ways of making money on your web site? If so, maybe someone who finds my article will click there. If not, the index of this page does not really reflect my intent. This happens- that’s why I will talk about specifically what kind of pages you should use Google ads on.

ValueClick Media also serves CPC campaigns, but only as a last resort- that is, only if your CPM campaigns have run out *or* if your eCPM for per-clicks is higher than your available CPMs ads.

Of course, Google also serves CPM- but not to all web sites. For Google to serve you a pay-per-ad-view advertisement, it has to be a site-targeted advertisement. That means the advertiser has to have specifically chosen your web site to show its ads on. As you might have figured out, not all sites get that privilege- only ones that are popular and serve a niche that an advertiser needs to serve.

Affiliate Programs
And then there are cost-per-action style affiliate programs. One of the biggest ones around is, of course, the “Amazon Affiliates”:http://associates.amazon.com/gp/associates/join/ program. This programs provides you with a percentage of the sales from users that click-through your web site. These programs turn you into a _salesman_ who earns a _comission_ on _sales_. Of course, in the Internet world, sales can mean downloads, actual sales or getting people to sign up for a service. AllPosters.com has also worked well for my site, but this is primarily because selling posters is a perfect fit for an “entertainment web site”:http://www.galaxyfaraway.com like mine.

Google AdSense also has a few solid referral programs- they pay good money for people who you can get to download Firefox, Google Pack, Picasa and so on. If this fits the kind of visitor you receive, it should work well for you.

Which One is Right for Me?
In my experience, Google ads perform the best of all- but only when placed inside the content, the way I have it in this article and some of my other longer articles. Out-of-sight Google ads are pointless. Follow the Google Help pages and you will get a lot of good results. If you have any problems, they deal with them quickly. For example, when I started serving Google ads here a lot of ads were related to “addictions” because of the namte. I contacted them and they took care that those ads were reduced.

My ValueClick Media provide a good base line, since I have 1 or 2 of them on each page and am guaranteed that much revenue based on traffic alone. They are also good with customer service questions, though light with on-site help pages. They have ads in all kinds of sizes (including the dreaded pop-ups and interstitials) and are usually Flash or images (rarely text).

Finally, Amazon and AllPosters work _only_ when the content calls for them. For my Star Wars web site, linking to deals on Amazon for Star Wars related stuff works quite well, as you might imagine. Also, sometimes people don’t actually buy what I had linked to but end up being reminded of something else they had to buy at Amazon. It’s all good- it’s all revenue. But use these sparingly and only when it fits perfectly with the content. If you are reviewing a product available on Amazon, link to it. If you are talking about movies, link to the best DVD deals. Turn affiliate programs into a _service_ to the visitor, not advertising.

Experiment
The most important thing is to experiment. Try different ad formats (banners, squares, skyscrapers, different size). Try different ad providers; as long as they accept you. For per-click campaigns, try embedding the advertising within your content- never being deceptive, but always making sure your visitors actually notice the ad. Try different locations within the content and different formats; there are different theories for text advertising. For example, people seem to be more comfortable reading across on wide advertisements than reading down on tall advertisements. The only way you will find out what works best for _your audience_ on _your site_ is to experiment.

Hope some or all of this helped and be sure to post questions, comments or your experiences in the comments below.

Disclaimer: I do make money if you sign up for some of the above-mentioned services using the links I’ve provided, but not much compared to what I make for using them as advertisers. If anything, the fact that I make money if you sign up should be considered as another point in their favor: it represents another way that you can monetize your web site. Each of the companies mentioned has been around for at least 5 years and sells adverstising for thousands of web sites.

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