Display Advertising vs. Affiliate Advertising for Niche Sites

If you run a niche website, you’ve probably wondered about the most effective ways to monetize it. Perhaps you’ve heard of display advertising and affiliate marketing, but you’re not sure which one you should use. In this article, we’ll look at the pros and cons of each and consider which is more likely to get the results you want.

What is a niche site?

A niche is a small subsection of a broader market. Therefore, a niche website caters to a narrow group of people who share a particular interest. A good niche site provides high-quality content and aims to solve problems and answer questions shared by its audience. 

Though a niche website’s overall readership may be smaller than that of more general sites, readers tend to be loyal and highly engaged. Therefore, there is significant potential for monetizing your niche site. Read on to learn about two of the most common methods.

What is Display Advertising?

If you spend a lot of time online, you probably see dozens, if not hundreds, of display ads every day. You might not even always be consciously aware of them as they are so ubiquitous. Perhaps you occasionally click on one, or maybe you try to filter them out with tools like AdBlock. 

Display ads usually run on a cost-per-click (CPC) basis. 

Display ads can be text-based or contain images and video material. Here’s an example of a display ad I’ve seen a few times this week:

Google Ads is the largest display advertising platform, reaching 90% of all global internet users. Ads can either be website-based, or user based. With web based ads, all visitors to a site will see the same ad. On the other hand, user-based ads are targeted to a person based on demographic information, search history, and browsing habits.

Pros of Display Advertising

It’s pretty quick and easy to set up display advertising. You apply to join a network, get approved, and follow the instructions to set up your website to display ads. Since it is by far the largest and most ubiquitous network, I recommend joining Google AdSense initially. 

As AdSense operates on a CPC basis, you make money for every click on an ad displayed on your site, regardless of whether or not the visitor makes a purchase. 

It is notoriously difficult to estimate how much money you can earn through display advertising. Google’s AdSense Calculator can give you an approximate figure based on your niche, location, and traffic. 

This might not seem like a vast annual sum, particularly for a site that receives 50,000 page views per month. But remember that once you’ve joined a network and added the display ads to your website, this is passive income.

Cons of Display Advertising

Some types of sites are not eligible to join display advertising networks. Google AdSense will not accept any websites that are adult in nature, related to drugs or alcohol, or contain a lot of profanity. Whichever network you join, take the time to read the guidelines in full before you start. If your site goes against their rules, you will not be approved. 

A significant disadvantage to display advertising is known as “banner blindness.” In other words, people see so many ads every day that they begin to mentally filter them out. 

Finally, people can choose to hide display ads. In 2019, Social Media Today reported that around 30% of all internet users utilized some form of ad blocking software. Many websites have circumvented this problem with pop-ups that give the user a choice between unblocking ads and paying for a subscription. Many users, however, will simply leave the site and never return.

How To Do Affiliate Marketing

What is Affiliate Advertising?

Affiliate advertising is a revenue-sharing scheme. You (the affiliate) promote products on behalf of a company (the merchant) using a special code or link. When someone purchases through your link, you make a commission. 

Affiliate schemes exist in almost any niche you can think of. You might be promoting physical products, informational products such as e-books and courses, or services such as web hosting or VPN systems.

Pros of Affiliate Advertising

Affiliate advertising can be highly lucrative. The earning potential is theoretically unlimited. Though the percentage of site visitors who will take the desired action is much lower (because in this case, they have to make a purchase and not simply click a link), the amount you earn per conversion is much higher. 

Most commission rates are in the 10-20% range, but some can be much higher - I’ve seen service-based affiliate schemes with commission rates as high as 75%! If you’re advertising big-ticket products or services, you only need a few conversions to earn a respectable income. 

Affiliate marketing is a more personal way of promoting to your audience. If you have a high level of trust from your site visitors, they will put a lot of faith in your recommendations. If you consistently offer valuable content, your readers will come to see you not as a faceless advertiser, but as a trusted friend recommending high-quality products and services.

Cons of Affiliate Advertising

It can take a significant amount of time to see success with affiliate advertising. Unless you already have a large and loyal audience, it’s normal for it to take several months before you start to see results. 

In affiliate marketing, the amount you make is directly tied to product pricing and commission rats. You have no control over these numbers, and they can be changed, seemingly arbitrarily, without any input from you. 

There is also a lot of competition in the affiliate advertising world. If you run a niche site, you may be competing with other bloggers or website owners in your niche for the same audiences and affiliate sales.

Is there any reason not to do both?

There are different schools of thought with regards to whether affiliate ads and display ads can coexist in the same space without hindering results or user experience. 

I recently ran an experiment to determine whether an affiliate website was negatively affected by the introduction of display ads. You can read about that in more detail, but here’s a quick summary of my findings:

  • The average time visitors spent on the site reduced, but the bounce rate did not. 
  • Email opt-in rates actually increased. We can extrapolate to assume that affiliate link clicks may increase as well. I speculated that this increase was due to the presence of ads functioning as a trust signal. 
  • The website’s speed was not reduced (this is important because site speed is a factor in both search engine rankings and user experience)

The conclusion is clear: you do not necessarily have to choose between one or the other. It’s entirely possible to utilize a combination of the two.

Display Advertising, Affiliate Advertising, or Both? 

As we’ve seen, there are significant benefits - and some drawbacks - to both affiliate and display advertising. But which one should you choose?

I’m afraid there is no definitive answer. Neither method is “better” than the other. I’m going to leave you with two key recommendations:

First, don’t be afraid to experiment and try things out. Try affiliate marketing and display advertising separately, and then try them together. Pay attention to what happens to your traffic figures, bounce rate, and income. Yes, this type of testing takes time, but it’s the best way to assess what works best for your site. 

Second, and perhaps the most critical piece of advice I can give you: always consider your audience first. Monetizing your site makes sense, but there’s such a thing as over-monetizing. If you use too many ads overall, regardless of whether they’re affiliate ads or display ads, you’ll annoy your site visitors, and they may not return. 

Focus on providing an exceptional user experience and the niche-oriented value that your fans expect.