Making Money From Your Website: Are Banner Ads for You?

August 31, 2011 by  Filed under: Search 
 

When you have a website, you hope that people will flock to your site to buy your product or service. To facilitate this, you aim to develop an attractive, easy-to-navigate website that will be a useful marketing tool for you. Wouldn’t you like to make money from your website itself, even as it was helping you cultivate sales of your product or service?

Since the 1980’s, when Prodigy first tried online advertising to promote Sears and other companies, opening a website to outside advertising has been a growing way to turn website space into revenue. By the early 90’s, the ads were clickable banners that ultimately became traceable for advertisers. In the early years, the advertiser paid the website owner based on impressions, but later this model was changed to ad response. Currently, Yahoo and Google AdWords have perfected tracking ad response and related it to keywords.

The principle is that you can sell banner ads on your site for a fee, which you set based on how much traffic your site commands. This might be the $5-10 range per thousand page views (CPM), but increases if your site has a highly targeted audience. If you generate 20,000 page views per month at $5 CPM, you might make $100, while for 1 million views, you would receive $5,000. According to Dr. Ralph Wilson writing for Web Marketing Today, banner advertising works best on sites set up to deliver a lot of information, such as news sites, hobby or industry-related sites, directories, download sites, databases, or movie listing sites. These sites tend to pull a lot of traffic, which makes them interesting to buyers.

As a website owner, banner advertising is not just a cash cow that grazes on your site. You have to feed and clean up for the cow. Assuming your site generates enough traffic to make banner ads pay off, you need to either work with a banner advertising agency or buy the appropriate software to manage the ads. You need to capture accurate statistics on the number and type of visitors to your site so that advertisers can judge if your site is a good match for their ad dollars. Unless you are working with an agency who does this for you, you will need to aggressively promote your site space and pull in advertisers who are a good fit for you. In short, you need to devote a combination of time and money to develop banner advertising as a steady revenue stream. You have to ask yourself if the return will be great enough to justify the costs involved in setting up and maintaining viable banner ad sales program.

As a website owner, the fundamental question to consider before selling space on your site is whether it will dilute your message. Will visitors click on the ad and never come back to your site? Is it worth earning a few dollars if potential customers drift away from you site, where you are selling a $100 product, and never come back? Considering that the “click through rate,” which measures how many customers click on the ad, averages only 1-2%, this is a small risk, but flashing banner ads can be distracting. If you think about the flack caused in recent years when doctors and lawyers have resorted to consumer advertising, you might also consider if banner ads are in line with your general image.

If you have a site which generates sufficient traffic to make banner advertising successful, you might consider selling space. Like any other business decision, you must carefully consider whether setting your website up to make money will be cost-effective and in line with your vision of how you want to promote your company.

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