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How website ads can earn money

01 Feb 2011

There are a few major avenues that a company will look to gain revenue from its website: firstly through contact from customers who use the website to decide to purchase; secondly through direct sales on a website shopping cart; thirdly through advertising other products on the website. Here I’ll cover the third one: how and when a business might use its website to gain revenue through advertising.
Advertising on a website falls into two main categories: Search & Directories, and Display. In my opinion, there is a further category covering advertorial spends, where reviews, discussion and other forms of content are sold to clients who are looking for coverage that is perceived as independent from their own marketing efforts.
Banner display networks are an option; however banners invariably have lower click rates than search and/or text options, especially if the banner is not related to the content on your page. A cost-per-click (or CPC) ad banner on your website may benefit the advertiser through display of their branding without the measurable click; therefore you need to work with reputable banner networks that help advertisers gain and target clicks from their network.
The major provider of small business website advert feeds in New Zealand is Google Adsense. Adsense is designed to help online publishers get the most revenue possible for their ad space, without having to directly manage advertiser relationships. When a publisher enables AdSense on their site, Google automatically maximises the publisher’s revenues every time a page loads. It does this in real time, by selecting the most valuable ad from AdWords advertisers and a large pool of other competing ad networks and buyers. AdSense for content publishers earn a 68% revenue share worldwide.
In my experience the Google Adsense program is the simplest system for a ‘set and forget’ scenario where the time invested in set-up is reasonably low in comparison to the potential outcome. You also have the opportunity to suggest to others wishing to advertise on your site that they use the Google Adwords system (where advertisers go to book ads) to target your website by selecting that their adverts also display the Google Content Network (that’s where most sites will be).
Beyond Adsense, you have the option of directly connecting with advertisers through their own affiliate programs. An affiliate program is one where you agree to promote another product on your website and maintain a direct relationship with the merchant (or an affiliate network that has multiple merchants available).
The key to gaining revenue through affiliate marketing is the connection between the goods that are being promoted and your online audience. There’s little point in advertising flight and hotel booking services through an affiliate program if your audience does not have a reasonable discretionary income. However if you’re deep into house decorating on your website and can find an affiliate program that is promoting cut-price paint, then you’re hitting a sweet spot.
Once you’re through the learning curve of dealing with the many acronyms that are used in the online advertising world (there are a few that are the most important like CTR, CPC, RPM and CPM – be sure to look them up) then you’re well placed to follow your own performance as well as get involved in community or friendly competitor discussions to find out what you should be aiming for.
The businesses that gain the highest revenue per visitor through their websites are constantly testing new advertising options, old options in new ways, and completely new programs across the spectrum of their visitors.
Further to this, you should question the appropriate positions on your website for advertising. While there are options for having hosted site search where adverts will display above the results, do you have the ability to remove competitive adverts so that someone searching your site for more information about your product isn’t exposed to advertising for your competitor’s product?
There are pitfalls here that can be easily missed, for example: putting ad banners across every page on your website including the main sales and contact page, thereby reducing your own conversions.
Lastly, you need to consider if you would be better off talking to your suppliers about promoting them, or even forgoing direct revenue in preference for a contra that will help build lasting relationships in your industry.
If you do advertise, remember to use products and advertisers that are complementary to your own offering, or an automated feed option like Google Adsense. 

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