A fairly common question I receive relates to adding ads to your site in order to generate revenue. How many visitors do you need, where do you get the ads and how much does it pay?
The good news is that you can get ads for your site if you have as few as 5000 visitors (or less) a month. The bad news is that it will hardly pay anything.
I suspect that many new Internet entrepreneurs are hoping to make the majority of their income from advertising. Although it is possible I feel that for most on-line business it is an unrealistic expectation. In order to generate a significant amount of income from advertising you will need to attract 10 to 100 times the amount of traffic to your site than a company that is selling a product or service. What do you have to offer that will do that (besides sex)? If the content you are offering is cheep or easily acquired (such as sex), then a lot of other sites will also be offering it.
Our primary business and source of income is developing software. Although we include ads in this newsletter and on our site, they represent a small secondary source of revenue. For many businesses however, even a supplementary income source can be quite valuable.
So what are realistic expectations when it comes to selling ads?
If your site generates a relatively small number of visitors (under 50,000 page views), you can still get ads from several sources. These are mostly "click" based which means that a visitor must click on the ad in order to generate a payback to you. The amount varies but generally seems to be in the 10 cent to 20 cent range. The actual revenue generated will depend on how good the ad is and how well it fits with the demographics for your site. From what I have experienced and heard, you can expect to make between $0.50 and $1.00 CPM. If you do the math it does not add up to much. 100,000 page views a month would generate approximately $75 income. In order to pay 1 person a decent salary at that rate you would need to generate approximately 10 million page views a month. Yeah right!
As your page views increase, you will become more attractive to some of the larger advertising distributors. The big daddy of advertising sales (the last time I heard) is Double Click. You will need to have over 500,000 page views a month to get their interest. They recently got caught harvesting and selling information gathered by cookies in their banners. Needless to say that does not encourage people to click on a banner. I do not have any specific information on the amount that you can hope to receive from Double Click (or their main competitors) but I expect that it is not significantly higher than it is for the smaller sites. Even if it were double or triple the CPM it would still only equal $1.50 to $3.00 per 1000 impressions.
What about selling impressions directly to advertisers? The rate cards I have seen typically list $25 to $50 per 1000 impressions. That's not bad. At that rate 100,000 impressions a month would generate between $2500 and $5000. At least it would if rate cards had anything to do with reality. Finding information on exactly how much a typical advertiser is paying compared to the rate card is somewhat difficult to come buy. Neither the advertisers nor sellers seem to be very willing to talk. I think it would be a safe bet however, that if many distributors are paying the equivalent of $1.50 to $3.00 per 1000 impressions, it is very unlikely that anyone is getting $50 or even $25.
The best information I have found suggests that $5 to $8 per 1000 is more realistic. At that rate 100,000 page views a month would generate approximately $500 to $800. This of course, does not include the cost of selling your ads.
Even though banner ads may not generate a lot of revenue for most sites, they have the advantage that they do not necessarily require a lot of effort. Once they are set up they can usually be left alone allowing you to concentrate on more profitable aspects of your on-line business.
If you would like to get more information about online advertising, there are several excellent newsgroups and mail lists. One mail list I often look at is OnLine-Ads which you can subscribe to at: http://www.o-a.com.
If you are interested in getting ads for your site, you can take a look at:
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