Now that you’ve created a website, how do you make money from it? There are at least two ways in which sites can make money:

1. Advertising Revenue
2. Selling Goods and Services

I shall deal with the second case, “Selling goods and services”, in another article. In this article, I will address the issue of how your site can actually make money from advertising.

Making Money From Advertising

If you look at many websites, you’ll probably find that there are advertisements that appear on most pages. If you are a newcomer to the scene, one might think that you must be a company or that your site must be famous before you can get advertisers, as well as in the case of printed publications.

In fact, anyone with a website can get advertisers. While it is true that if your site is well known, can get companies to contact you to offer to advertise on your site, you can get advertising revenue even if you are just starting and your site is relatively unknown.

The way is to join as a “subsidiary ” of various sites, either directly or through an affiliate network. An affiliate network is simply an intermediary where you can choose from a variety of advertisers.

Payment Schemes

Before joining any program, you should probably be aware of the different payment schemes available.

1. Pay Per Impression (CPM)

   Here, you are paid according to the number of times the advertiser’s banner is displayed on your site. The amount you earn is typically calculated based on the number of thousand impressions of the banner (impressions = number of times the banner is displayed), often abbreviated CPM (cost per thousand, with the M being the Latin numeral for thousand). That is, $5 CPM means that you get paid $5 for 1,000 displays of the banner. In general, the amount paid is usually small, but it is easy to earn since everytime a visitor loads the page, you earn. This is known as a “high conversion rate”. Needless to say, this method will allow you to automatically earn more if your site attracts a lot of visitors.

2. Pay Per Click (PPC)

   When you are paid per click, you are only paid when visitors click the advertiser’s banner on your site. The amount paid is usually higher than the pay per impression scheme. Whether you get a high conversion rate here depends on the banner (whether it attracts people to click it), although in general, it has a higher conversion rate than the pay per sale method. A high traffic site will probably enjoy a higher click rate than a lower traffic site, although you will probably get better results if your banners are carefully selected to suit the target audience of your site.

3. Pay Per Sale or Lead

   While you will probably get the highest payment rates with this method, it has the lowest conversion rate of the three schemes. You will only earn if your visitors click through the banner and either purchase an item from the advertiser or take some other prescribed action (eg, sign up for a service). Like the Pay Per Click method, you get much better results if you carefully select your advertisers to suit the target audience of your site.

In general, to avoid wasting resources in issuing cheques for very small amounts, advertisers will usually accrue the amount owing to you until it reaches a certain level (such as $25) before they pay you.