monetize on website traffic

Making money from your traffic

So now you have people coming to your site - you have website traffic. Every time you check your visitor traffic statistics you see them grow exponentially. Great! Now what?? Traffic alone doesn't make you any money. You have to sell something.

You have two main choices - making money by selling something to your visitors or making money by selling your visitors to advertisers (well, not visitors per se but the traffic they generate - in other words, their attention).

The two options are not self-exclusive and you can still sell advertising space on a website that sells a product or service. Whatever the case - whether you have a free site with banner advertising or Adsense advertising, a site that sells a product or service or a combination of both - the higher the traffic the higher is your income.

Monetizing by selling online advertising space

If you wanted to sell advertising space on your website until some time ago you had two basic choices - selling advertising directly to the advertisers or selling advertising via banner networks.

If you were selling advertising via banner networks in most cases you would have to have a fair bit of existing traffic to even be able to join a network - we are talking about over 50000 unique visitors per month.

If you were selling advertising space on your website directly, you would also have to have a lot of traffic or a very specialized website with valuable traffic to get the advertisers interested. Naturally a lot depends on your individual sales skills, but at the bottom line the price you can get coupled with the amount of sales effort required to make a good sale for smaller sites wasn't worth the effort. As a general rule of thumb, it makes sense to sell online advertising directly if you have a very large site with millions of visitors.

So as you can see at that point if you had a small or medium-size site you have very limited options to generate income from advertising and your only way to make any money was to sell a product or service, which required additional setups like payment options and such. My first site that I started with had about 30000 unique visitors per month (which in itself isn't too bad) and I had very hard time generating any income from it, as I wasn't about to go through the hassle of selling a product/service (mostly because of the payment ordeal) and advertisers weren't really bothering with a site of this scale. On a side note, the experience with building and promoting that first website has helped me earn some good $$ later, so definitely not regretting it.

Selling advertising with Pay-Per-Click programs

In the past a number of decent pay per click programs have evolved that offer opportunity to sell advertising on your site and earn money even for smaller publishers not generating a lot of traffic. The five that I know are Adsense (Google), Chitika, Yahoo!, Clicksor, Adbright. These programs let you as a publisher (provider of content) earn money from a smaller number of visitors and once you generate a minimum requirement ($100 is quite common) they will send you the payment. These programs take care of selling YOUR advertising space. In actuality they sell your advertising space as theirs, but we are not to build a brand name here - we are here to generate some additional income with the least hassle and investment.

I have had experience with Adsense and Chitika. Chitika seems to be more straight forward about the payout whereas publishing Adsense ads is pretty much trying it, seeing if you get the money you expect and if you don't try elsewhere. In my experience going elswhere was not as productive money-wise as going with Adsense. One of the reasons could be that Adsense seems to provide better targeting of their ads, which increases click through rate and results higher earnings. What has also made me favor the Adsense alternative was that Adsense offers a direct deposit option, whereby they wire the money straight into your bank account, which is very convenient.

The formula of online income

By now we have discussed that amount of traffic and cost of advertising are the two factors that determine your online income. To calculate how much you will earn from your website there are two different formulas. One is applied to CPM-based advertising (where advertiser pays for a number of times his advertisement is displayed) and the other is for CPC-based advertising (whereby advertiser pays for each click).

For CPM the formula would be: number of page views (depends on traffic) x cost per impression (usually sold in thousands) = final income.

For CPC the formula would be: number of page views (depends on traffic) x click through ratio (percentage of page views generating clicks) x cost per click = final income.

As you can see in the CPC-based advertising you have one more factor in addition to traffic and cost of advertising - click through ratio. By improving your click through ratio you can increase your total advertising income without icreasing the traffic.

I would name two factors that affect your click through ratio - accurate targeting of ads and positioining of the ads. One of the main reasons Adsense is considered the leader among Pay-Per-Click programs is because they are believed to have the best targeting of the ads. The other factor - positioning of the ads - is within your control. This is something you have to experiment with. Should advertisement blend in with your page content or should it stand out? How much advertisements to use on a page? Where to place the advertisements. These are the things you should experiment with to find an optimal placement for the ads.

Making money by selling a product or service online

Selling a product or service online through a website was probably the orignal and primary way to make money on the Internet until a few years back.

Comparison of online sales compared to conventional methods

Internet offers a great and inexpensive (or even free) way to sell goods and services - no office/warehouse rent to pay, no (or less) personnel to hire. Consequently, products sold online have lower cost and you have a price advantage compared to conventional shops. Another thing is all of that is easily accessible to potential buyers - they do not need to drive to your shop or office for miles - it's all there right at their fingertips.

The fact that your product or service offered online is so easily accessible serves you a good and bad favor simultaneously. Your customers can get to your website easily but just as easily they can leave it and go to another website. "Just a click away" has always been the Internet motto. Keep that in mind. Once you got your visitors, keep them and keep them coming back.

When you are selling a product or service via a website you are lacking the personal contact that customers get by visiting a store or an office. Try to make the experience of visiting your website more personal. Little things like a clock, or a greeting depending on the time of the day could be good. The best thing you can do is provide a phone number to call - this way your potential customer knows that they are not just dealing with a machine and there is a human in case they need help or assistance. Providing a phone number will get you as close to a real store/office as it can get online. If for one reason or another you don't/can't provide a phone number, at least you have to have on a product/service website is a contact email or contact form. If you don't provide any way for your customers to contact you, you are making your chances of selling anything to them close to zero.

Selling a product/service vs. selling advertising space

Monetizing on your website from selling a product or service has at least one advantage and one disadvantage compared to making money from selling advertising space on your website.

The advantage: if you have a good service/product you can make a relatively high income on each sale, therefore making higher income with less traffic, whereas when selling advertising you need to sell traffic in hundreds, thousands and millions hits to make a considerable income.

The disadvantage: when you are selling a service or a product to your visitors you need to arrange a few things. The main two considerations are accepting payments online and working out a product/service delivery solution(s). For both you will need a higher level of technical expertise than you would normally require for selling advertising space. This, however, shouldn't be discouraging as today there are a lot of intermediaries who provide these services to you at a reasonable cost but with minimal effort from your side.