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How to Monetize Your Website by Selling Ads

website ads

Many internet marketers understand just how lucrative it can be to monetize your website by selling advertising space on the pages of your site. The ads can be either text ads (consisting of a hyperlink embedded into the lines of an article that is related to the hyperlink) or banner ads (graphical ads that act as a link).

Many people are becoming selective with the websites they choose to advertise on, leading web developers to place fake ads on their site. This is common and attracts advertisers by making them believe that other companies are already advertizing on your site.

There are two important points that you must fully understand before you start to monetize your web site by selling advertising space:

  • Although ads are among the easiest ways to make money, less-established websites should only rely on them for supplemental income. The majority of your income should still be coming from more traditional means, such as your direct sales.
  • The ads you place on your website should directly appeal to the majority of your traffic. Advertising companies will quickly cancel the deal you've struck if they aren't getting the hits they expect.

How You're Paid for Placing Ads on Your Site

Ads are generally categorized according to exactly how you'll receive payment in exchange for placing them on your site. The various advertising types include CPM (Cost per Impression), CPC (Cost per Click) and CPA (Cost per Action). CPM ads require the least amount of interaction on the part of the end user, while CPA ads require the most.

CPM ads pay you a certain amount each time 1,000 users view the ad. The user does not need to actually click on the ad; rather, he or she only needs to view the page on which it's placed. For example, an ad that pays $5 CPM will generate $100 per month if you have 20,000 monthly page views, or $2,500 per month with 500,000 page views.

CPC ads reward you with a certain amount of money each time a user clicks the ad on your site, and these are more common today than CPM ads. When using CPC ads, it's crucial that they directly appeal to your audience. With this form of advertising, zero clicks equals zero advertising revenue.

CPA ads require additional interaction beyond that of CPC ads. The user might need to purchase a product, sign up for a subscription or complete a survey after clicking a CPA ad in order for you to get paid. You might earn a percentage commission or a static cash value each time a CPA ad is successful.

How Big Should Your Website Be to Sell Ads?

This depends largely on your content and the type of advertising you wish to place. Obviously, it doesn't make much sense to bother with advertising if you only run a personal site that receives a few hundred page views each month. However, if you run a blog (for example) that caters to a popular niche, advertising might become worth your time once your monthly page views are measured in tens of thousands.

You can use a simple formula to determine your potential monthly ad revenue and then decide for yourself whether the size of your site justifies CPC advertising:

Monthly Ad Revenue = X * Y * Z

  • X = monthly site visitors
  • Y = percentage of those visitors that will click the ad
  • Z = dollar amount you'll receive per click

Variables X and Z are easy to track, while variable Y will rely on an estimate if you haven't advertised with similar methods in the past.

How Much Should You Charge for Your Ads?

The amount that you should charge also depends on a number of factors, including the amount of traffic your site receives and the willingness of various advertisers to place their ads on your site. Charging too much per ad will alienate advertisers, leaving your site with no ad revenue. Charging too little will prevent your site from earning its maximum ad revenue potential.

Usually, it's best to start by charging a very low rate, such a $0.50 CPM, and then increase your rates as your site grows in traffic. This will allow you to make a reasonable profit from ads while providing you with the widest selection of advertisers, subsequently allowing you to choose the ads that best fit your audience. Remember, your initial goal is to attract more and more advertisers, not to immediately become rich from your first ad placement.

Placement and Size of Your Ads

Some advertisers will request specific size and placement characteristics in exchange for various rates. However, the option of whether or not to accept the deal and place the ad is still yours.

The placement of an ad, both within your site as a whole and within the page on which it is placed, can greatly influence its visibility, the number of clicks it receives, and the amount that an advertiser will be willing to pay to place it. Obviously, ads placed on your homepage will probably get the most views. However, ads placed deeper on your site may reach out to a more targeted audience. Ads placed above the "fold," which is defined as the bottom of the viewable area when first viewing a page without scrolling, also tend to receive far more views and clicks than those below the fold.

Bigger ads are more visible and therefore fetch higher rates. Some of the most common ad sizes to consider include:

  • 234 x 60: Half Banner
  • 468 x 60: Full Banner
  • 125 x 125: Square Button
  • 120 x 240: Vertical Banner

Creating a Proper Advertising Page

You can attract additional advertisers by devoting one page of your site or blog strictly to advertising. This page should include a brief paragraph describing the purpose of your site and the reasons why they should pay to place advertising on it (e.g. traffic numbers, including unique visitors and page views).

You can also list your specific requirements, including the ad sizes you're currently accepting, the prices you charge and how you expect to be paid. Finally, indicate where their ad will be placed by taking a screenshot of the intended page and circling the ad location.

Keeping the Clients Happy

After you've struck a deal with an advertiser and placed their ad on your site, it's crucial to maintain a strong relationship. Check in with the advertiser frequently to determine their satisfaction with the ad, even if you're already using PHP5 tools to track its performance.

When the client's contract is about to expire, consider offering a reasonable discount to attract a renewal. Keep your client abreast of any changes or problems with your site, such as upcoming downtime or structural reorganization.

Mike Quayle

Posted on 13th September, 2011 by Mike Quayle

About Mike Quayle

Mike Quayle is a SEO, content writer, and marketer from Seattle, Washington.

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