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Intro To Web Marketing

So just how do you make money on the Internet?

There are three primary methods:

Sell products. This tends to be an extension of traditional catalog marketing, and is the approach of well-known sites like Amazon and CDNow. A major selling point is large selection and the convenience of shopping from home. The downside is that shipping obviously takes longer than going to a physical store.

Sell services. This tends to be more oriented around items like Web site hosting, design, and ecommerce systems; things which are of use to other Web site owners.

Sell advertising. This is our focus...

Web advertising has some similarities to television, and some very significant differences. Like television, the basic idea is to provide content (often for free), to get the audience looking at the screen when an ad is shown. A big difference is that Web sites can be done on a much smaller scale (and with much smaller expense.) The payments are also likely to be structured differently, especially with a relatively low-traffic site. The programs listed here on Web Sponsor Zone have three ways of calculating commissions:

Click-Through - A very small amount is paid for each time a visitor to your site clicks on an advertisement and is sent to the sponsor's site.

Per-Lead - A somewhat larger amount is paid when one of your visitors clicks an ad, goes to the sponsor's site, and does something to indicate interest or qualification of some type, such as filling out an application form.

Per-Sale - A commission is paid on items or services sold to a customer who came to the sponsor's site via an ad on your site. Generally, the amount of the commission is significantly higher than for Click-Through or Per-Lead Programs.

The number of Click-Through programs is smaller than Per-Lead and Per-Sale, because advertisers are reluctant to pay for traffic which hasn't been "qualified," (meaning that Click-Though visitors could be just browsing with no intention of buying anything), and because of fraud by webmasters clicking (manually or via scripts) on the banners on their own sites to inflate the hit counts. One of the major networks, Microsoft's bCentral, is phasing out Click-Through payments.

With Per-Lead and Per-Sale programs, an important statistic is the Conversion Ratio. This is the ratio of people who actually do something to trigger a commission (fill out a form or buy something) compared to the total number of people who clicked the banner. Depending on the program, price, product, or service being sold, the conversion ratio may fall into the range of 1/1000 (or worse) to 3/100.

Some higher-traffic sites, which receive thousands of page views per day, may be able to negotiate payment based on the number of times a banner is displayed. This is a very small amount for each "impression" (view), and is generally measured as CPM, or cost-per-thousand impressions. However, this is not really an option for small site owners.

Important factors in maximizing revenue from banner ads are:

Content And Design of your site - Do people have a reason to visit, spend some time there, and gain something from your site, whether they click on a banner or not? Is it visually attractive with "friendly" navigation? Do they have a reason to return?

Targeting - Are the ads relevant to the content of your site? Your content should focus on a clear topic, with ads to match. For example, a site about customizing automobiles should have ads for parts suppliers and insurance. A film review site should have ads for video retailers.

Traffic - Despite all of the necessary effort towards the above factors, this is still very much a numbers game. More total visitors means more total responses (clicks, leads, sales) to ads, which means more commissions.

Choose your sponsors carefully, and check out our section on promotion and traffic-building.


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