Since advertising is usually the first pit stop on the wacky road to web monetization (for better or for worse) this guide is here to give you a brief introduction to some of the common methods available to you.
CPA
Cost Per Action (Affiliate) programs are sold through marketplaces likeCommission Junction. These advertisements usual marked by high (sometimes very high) payouts, but the downside is that in order to make any money at all — users have to purchase the product or services from the advertising company through your site.
Typically, these types of ads perform best on high volume sites with services that compliment the product that the advertiser is trying to sell. If your site is about concert reviews, a Ticketmaster Affiliate program will perform a lot better than if your site was about Model Trains. If your site has no particular focus, Affiliates are going to be a hard sell.
I would suggest trying them out but realize that many, many times these will make you no money at all.
CPC
Cost Per Click advertisement is the first stop for many entrepreneurs looking for a way to monetize. Google Adsense is the most well known CPC vendor. The benefits of CPC are that these ad blocks are easy to set up, and they can potentially generate revenue even at small levels of traffic.
The downside to CPC advertising is that the revenue it generates is uneven because it strongly depends on ad placement location and niche your service operates in. Certain industries (typically those that sell high ticket products and services) can do really well under this model but many will find themselves with an inventory full of really low paying ads.
Typically, CPC is a good place to start until you get your feet wet; however, unless it’s consistently successful for you it does not scale as well as other options.
CPM
Cost Per Thousand advertising are what networks like Casale Media andTribal Fusion deal in. You are paid per impression instead of for each click. Typically, for web services with high volume but relatively low engagement, this is a great option for monetization.
Not only do these networks often pay more than CPC advertising, but your payment is directly related to the number of pageviews that you get to your site. This makes it a lot easier to predict your advertising revenue from month to month.
The biggest drawbacks is that many of the good networks are difficult to get into, and the bad networks offer CPMs that are too low to be a viable revenue model. I suggest constantly shop around for better CPMs. As you grow and your audience becomes more engaged, you should be looking for networks that are willing to pay you more for that engagement.
Boutiques
BlogAds, Federated Media, and The Deck are three examples of boutique ad networks. Typically, these companies focus their attention on specific verticals and have extremely high standards in the sites that they let in. As a result, the CPMs that they pay are often substantially higher than similarly positioned networks.
In order to be considered for one of these networks, you will either have to have a service that is high profile, targets a very specific niche or extremely high volume. Since these are premium advertisers, they might also have stricter rules about how their ads can be displayed.
Usually, by the time you are ready to apply for a Boutique ad network your real question will be whether you want to outsource your sales or handle them yourself. If you decide that doing sales internally is not in your best interest, these networks are an excellent source of revenue.
Direct Sales
If you have the team, the time, and the patience the best way to make money off of ads is selling them yourself. Not only do you not have to pay an ad network a portion of what you make, but you also have complete control over how the ads will be presented and what type of advertisers that you choose to take on.
It sounds great but the big thing to remember is that selling advertising is not easy. Everything from identifying potential advertisers, to determining a price point that makes sense for your customers to providing them with the details of how well their ad is doing takes time. When you are a young company, that time might be better spent taking care of more pressing problems.
If you are ready to invest in an ad sales team, the biggest thing to remember is that advertisers pay premiums for strong verticals, high click through rate and exclusivity. When building your package, try to have one or more of these “features” as a part of it.
And Many More . . .
There are many, many more ways to monetize a web service but advertising can be a quick, simple way to generate initial working capital. The best advice that I can give when looking for an ad network is to do your research. Especially if you have some decent traffic, everyone will be trying to sell you their ads. Be smart, be selective and do what’s’ best for the long term.
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