A business website doesn’t just exist to advertise your products and services. On the contrary, a well-developed site can actually generate income for your company.
Website monetization refers to the various methods used to convert site traffic into real online revenue. Not all monetization techniques, however, are appropriate for every business. Using the wrong advertising type or failing to take users’ privacy concerns into account can actually result in a reduction of traffic in the long term, so it’s important to know what can and can’t work for your business.
Here are six of the most common methods of monetizing a website, along with tips for deciding which option is best for your business.
1. Affiliate Marketing
Affiliate marketing is the process by which a website earns money by promoting the products and services of another business. A good fit for product-centric sites, affiliate marketing affords the host website a commission when a visitor purchases an affiliate’s goods. For example, the Amazon affiliate program is one of the largest of its kind and provides marketers with a commission of up to 10% on product sales.
Although affiliate marketing can be lucrative, it’s important that website managers evaluate whether or not an aspiring affiliate is a good fit for the company. After all, showcasing ads for irrelevant or low-quality products on your website can annoy your visitors and even diminish clients’ trust in your business. For these reasons, affiliate marketing is most appropriate for social networks, news sites and forum sites where customers regularly post product reviews.
2. Banner Ads
Banner ads are those rectangular advertisements that appear on webpages to promote another company’s products or services. High-traffic sites offer invaluable digital real estate for potential advertisers, and they can earn significant revenue from banner ads as a result. On the other hand, newer sites and those with comparatively low traffic are unlikely to make much money with this technique.
Aspiring advertisers should also note that not all web audiences are created equal. Whereas sites with large, wealthy audiences are typically ideal, smaller advertisers may be able to earn more if they target highly relevant sites. For example, a family-centric blog is far more attractive to a company that sells children’s clothing than one that promotes auto parts.
While banner ads can generate helpful revenue for your website, hosts should use their judgment when selecting potential advertisers. In the long run, showing too many irrelevant or intrusive display ads can affect user experience and turn people away from your website.
3. Site Sale
While some owners view their websites as passion projects, others are content to spend just a short time developing a page before moving on to the next undertaking. Site flipping involves selling your website to an outside party in order to turn a profit. Many online resources exist for selling websites, including eBay’s page for website and business sales.
Not all websites are suitable for flipping, and salability tends to depend on overall income. To attract potential buyers, a website must generate a great deal of traffic or successfully earn revenue through other methods of monetization.
4. Pay-Per-Click (PPC) Ads
Referring to “sponsored” ads that appear at the top and side of search engine result pages, pay-per-click ads are a great way to drive qualified traffic to your website. While most people in the e-commerce field are familiar with the concept of PPC advertising, website owners may not realize that these ads can offer an effective method of monetization as well.
Just as Google AdWords places business ads on the Google search page, Google AdSense performs a similar function for publishers such as website owners and bloggers. If your website offers tips for healthy living, for example, Google AdSense may opt to place ads for workout clothes or cleanses.
With PPC advertising, advertisers pay the host site for each click their ads receive. As a result, this monetization method is only lucrative if your site generates significant amounts of traffic on a regular basis. Additionally, the type of site you host can affect the value of your PPC advertising, as higher-cost products tend to pay more for clicks than those with lower value.
5. Email Lists
Many websites use mailing lists to keep customers informed about new products and upcoming events. Business owners may not realize, however, that they can also earn money by “renting out” their email lists to other companies.
As the name suggests, email rental involves sending online communication to members of your mailing list on behalf of an outside company. If you have a robust mailing list, email rental can yield significant revenue for your business. In fact, a recent report suggests that the average email-list rental fee is $68 per thousand addresses.
Unfortunately, this monetization technique is not without its drawbacks. When you rent out your email list, you run the risk of annoying clients with irrelevant promotions. In the long run, you may even lose customers who opt to unsubscribe rather than continue receiving unwanted communication.
6. Membership Sites
Membership is exactly what it implies: a site that offers users select content for a price. To succeed with this method, however, website owners must build a team of content creators and find users who are willing to pay for that content. VIP treatment, enhanced networking opportunities and discounted access to products and services are just a few of the perks that companies offer to attract premium members.
While membership sites offer benefits like continuous income, they also pose some challenges for site owners. Not only do these sites require more money to set up and maintain, but small businesses may also struggle to produce the extra content needed to keep members engaged. Additionally, websites risk upsetting their regular visitors if they put some of their best content behind a paywall.
Monetizing your website can be a great source of funding. However, if your content isn’t up to the task, you are far less likely to see a profit. Take the time to develop high-quality content and generate a solid web following before putting effort into monetization.
To generate even more revenue from the internet, see our piece on five tips to improve your online marketing.