How to Make Money from Your Website Using Advertising

You have managed to get your website to that magical point
where you have established popularity, traffic, loyalty and a
community of fans. Your site contains a wealth of information,
resources and services that you provide free because that’s just
the kind of person you are. You may not have intended to make
money from your site but now that you have an audience you
realise that it’s possible, or perhaps you have to start
thinking about generating income because your costs to manage
the site have increased and it’s starting to hurt.

You have been diligent over the years to build up your community
and wonder how to go about making some revenue by leveraging
this audience (as the marketers would say, you want to
monetise your site). Maybe you have some big dreams and
plan to one day generate advertising income from your new web
project. This is a very common plan for online business given
people tend to expect information and services to be free.
Advertising may be one of the only revenue generation strategies
available to you.

How much traffic do I have to have to make money?

In my experience once you have about 500-1000 unique visitors
per day to your site *at least* before you can start to make
real money. You can make chimps change from day one from your 50
hits, but this article is targeted at those that have a larger
audience, or perhaps are constructing a business plan (either
real or in your head) and would like to know how to go about
monetising your website. If you get more then 1000 unique
visitors a day chances are you already make money from your site
(if not you should be!) but my points are still relevant.

As per usual I will illustrate my article using real world
examples from what I did to make money. Over about five years I
managed a hobby site that started off as a very local site
focusing on people in my area that played the game Magic: The
Gathering. I wrote reports and did news coverage for the game.
Later I expanded the site to Australia and eventually opened it
to the world although it remained mostly Australian with a good
chunk of Asians and New Zealanders.

Banner programs

At around the time I was getting 500 unique visitors a day I
decided to start playing with advertising methods. This was
before the advent of Google Adsense (more on this later) but
there were many banner programs available that paid either on
cost per click (CPC) or per impression basis. An impression is a
banner being displayed to a user once, a click is someone
clicking the banner and visiting the site being advertised.

These networks act as a middle man between business that want to
advertise and people like me that have an audience and want to
make some money by displaying banners. Unfortunately these
programs display banners that often don’t match your audience. I
tried a few but it was a short lived experiment that made me a
few dollars if that.

I recommend you avoid any banner programs. If you are confused
about what I am talking about regarding banner programs do a
search for Burst Media to get a grasp of how they work. For
small sites they just don’t make much money. For large sites
there are much better ways to make money. There are people out
there that make good money from these programs (I’m sure the
program owners do!) but in my experience a little effort to find
the right type of advertising can yield much better results.

I decided the best way to make money was to really leverage the
demographics of my audience. I had a fairly focused niche, card
game playing young males. I started by emailing all the local
and international card game shops and asked if they were
interested in exposure to my market. Instantly I had responses
but I had to come up with a pricing structure first.

How much should you charge?

By this time my site was getting close to 1000 unique visitors
per day, with about 300,000 impressions per month. I had done my
research and I knew that advertising on websites was usually via
the standard 468×60 banner so I would start with that. I also
knew that many companies charged by what is called CPM or cost
per 1000 impressions. Back then this was by far the most
commonly used scale for pricing of web advertising and you could
expect to earn anywhere from $0.10 to $10.00 CPM. I never liked
this method of advertising because it didn’t guarantee any
visitors. Charging by click-throughs is a far better method, but
didn’t become mainstream until later. I decided that in order to
keep my advertisers I had to offer value so I went for a blanket
approach. I started charging a flat rate of $30 per month to
have a banner on my site which offered as many impressions that
my traffic could provide. I signed up my first few advertisers
at this rate.

Banner management software

In order to “rotate” different banners across my site I needed
some special software that would dynamically place banners. This
allowed me to have more than one advertiser banner in a single
location so I could optimise my adspace and make sure my
audience didn’t get too bored from seeing the same banner over
and over again.

Let me save you some time, phpAdsNew is the best banner
management software out there. It’s under an open source license
and has all the features you could ever wish for at a price you
can’t beat, it’s free. If you don’t believe me and absolutely
have to try searching elsewhere try searching the PHP Resource Index.

There is a learning curve with phpAdsNew and you do have to
install it on your own server. If you are like me and you do
things like this yourself most of the time you shouldn’t have
too much trouble. Otherwise you might try contacting your
favourite ITGeek and get them to give you a hand.

Statistics are important

The best feature with phpAdsNew is that it allows you to provide
a unique user login for your advertisers to check their banner
statistics in real time. This means at any point in time they
can learn how many impressions and clicks there banners are
receiving from your site.

Before you start searching for advertisers you should be very
familiar with the statistics of your site. Do you know how many
unique visitors you get? How many hits you get? How many
impressions? Do you even know what the differences are between
these? Try this stat
s terminology primer on for size if you don’t.

Most web servers come with a statistics package. Ask your web
host if you don’t know. The most common are Awstats and
Webalizer which often are preinstalled on many hosting packages.
Become familiar with these packages so you can accurately assess
your site traffic.

Increasing ad revenue

I now had the foundations laid and was serving the ads of my
first few advertisers. From the point onwards I went to work
attracting more advertisers by directly emailing North American
online card stores and other related sites. I kept an Excel file
to track which websites I had emailed and their responses so I
could follow up in a timely manner.

I created new banner positions and started initiatives like a
newsletter to generate more revenue. I created monthly packages
that combined newsletter advertising and different banner
positions and offered them at $500 per quarter. I increased the
top prime banner position fee to $50 and started offering a
tower banner position for $50 as well. Eventually I had to limit
the number of banners I could take in the prime positions to
avoid dilution. I had a guarantee in place that offered at least
30,000 impressions per month (averaging 40,000-60,000) to
advertisers so that they always received a good equivalent CPM
rate. I even had some advertisers purchase the rights to “own” a
position for a certain period to make sure no other advertisers
banners would be displayed.

Eventually I reached a point where I was averaging $500 per
month and peaked at $1000 in one month. Some advertisers came
and went quickly but many stayed loyal and in fact still
advertise today though I sold the site a long time ago. The
niche for the site was so focused that it became the pre-eminent
site for Australia in it’s marketplace and consequently some
Australian advertisers simply stuck their banners up as a
branding exercise. They knew that the exposure from the site
would help to align their business as one of the pre-eminent
retailers or event organisers for the game. Some advertisers
stopped caring about click through stats and kept advertising
purely for the branding exposure.

Google adsense

At some point Google Adsense popped up and I was in with other
early adopters to try it out. My results were okay. The money
wasn’t nearly as good as the established relationships with
advertisers I had, however the ads being displayed were a lot
more targeted than banner networks. I eventually stopped using
Adsense because I could better monetise the adspace with my
traditional advertisers. However that was before Google went to
work providing such a variety of banner sizes and display
options. Nowadays Google Adsense is a viable income source for
many websites so I definitely suggest you look into it as a
possible option for generating revenue but remember it’s not the
only means and you can earn more if you get busy chasing
targeted advertisers.

Ongoing maintenance

I wouldn’t call web advertising income passive, but it sure is
close. The systems I had in place handled everything
automatically. While I did have to manually create advertiser
accounts, pursue advertisers and control billing, once the
systems were in place, in particular phpAdsNew, I didn’t have to
do much. Of course depending on your website often the
maintenance of your community is were the labour is involved,
but chances are if you started the site you either enjoy it or
have plans in place to eventually remove yourself from the
maintenance role. In the end I sold off my site but if it wasn’t
for the advertiser revenue my asset would not have been valued
nearly as highly as the final sale price. Investing in
advertising is like investing in any asset, the time and labour
you put in today will lead to benefits in the future