We recently covered the seven most common monetization methods, or ways that websites can make money from their traffic. As noted in that post, the method that’s most appropriate for a specific site will depend on the specifics: the niche, the audience, the type of content, the amount of traffic, and the loyalty of visitors (among others). Today, we’ll help you figure out which monetization method is the best fit for your specific site and how to monetize a website in those niches. (By the way, readers enjoy access to our in-depth Ad Network Reviews, plus other monetization tools, and guides)
As we’ve noted previously, most websites should be monetized via multiple revenue streams–it’s likely that the best route for your site to take may involve more than one of these.
What It Is: One of the most common forms of website monetization, display advertising simply refers to the banner and text ads that you see on most sites.
Good Fit If: This monetization route is often fruitful for sites that have:
Bad Fit If: Display advertising is a popular monetization method, but of course it isn’t for everyone. Specifically, any sites with paying users may want to think twice, especially if there’s any risk that you’ll annoy your subscribers with an abundance of banner ads. Andrew Sullivan’s The Dish stands out as a site that made the conscious decision to avoid display advertising and focus instead on subscription revenue. Here’s an excerpt from the subscription page there:
How To Proceed: If you think display advertising is a good fit for your site, your next decision will be whether you want to sell ads through a network (such as Infolinks) or try to sell directly to advertisers and ad agencies. Going through a network will get you immediate results with little upfront costs, but selling direct will ultimately lead to much higher revenue.
Bottom Line: Even if you’re not going to make a ton off of display advertising, the ease of implementing this monetization method makes it worth embracing for most website owners out there.
What It Is: Affiliate marketing involves steering your visitors to products and services of a third party merchant; if that merchant converts your referrals to a sale, you get a slice of the action. Below is an integration of an Amazon widget into a sports blog; for each sale generated through that widget, the publisher gets a portion of the total purchase price:
Good Fit If: Affiliate marketing can be a good fit for sites that feature regular product reviews or include a forum:
Bad Fit If: Again, affiliate marketing may not be an ideal monetization route if your audience relies on you to be an objective expert on a subject or if they’re paying you for the content you produce. There’s almost always some tradeoff between the amount of money you can make via affiliate marketing and the level of trust that exists with your audience. If you’re not willing to sacrifice a bit of that relationship, affiliate marketing may not be for you.
How To Proceed: Similar to display advertising, affiliate marketing involves a choice between utilizing a network (e.g., Commission Junction) or setting up direct relationships with merchants. Again, a network will be more immediate and easier to set up but direct relationships can be much more profitable over the long run.
Bottom Line: Like display advertising, affiliate marketing can be very easy to implement (and start collecting affiliate payments) if it’s a good fit for your site.
What It Is: Lead generation can be thought of as a cousin to affiliate marketing; it involves capturing information about qualified visitors (such as email address or phone number) and selling that information to a third party who may want to sell to that “lead.” Thumbtack generates leads for a wide variety of businesses, from handymen to petsitters to legal assistants:
Good Fit If: Lead generation can be an extremely profitable business, but most publishers probably won’t have a site that accommodates this monetization method. If your site meets these criteria,
Bad Fit If: Lead generation won’t work well if your site doesn’t cater to a targeted audience with a consistent and logical need for some product or (more likely) service; for example, a general news site or political blog doesn’t have any logical tie-ins to third parties who might be interested in acquiring leads.
Lead generation can also be a poor fit if you have a relatively small but loyal audience that visits your site regularly. This monetization method is more effective for sites with a high percentage of “one off” visitors.
How To Proceed: The easiest way to get into the lead generation game is to work with one of the major lead aggregators out there, such as QuinStreet. Spencer Haws has some good thoughts on lead gen niches; Dragan Sutevski has a detailed series of posts on the basics.
Bottom Line: If your audience is right for it, getting into the lead gen business can be relatively painless–and very profitable.
What It Is: Email rental is exactly what it sounds like: renting out your email list to third parties looking to promote their products or services to your audience. You essentially agree to send an email on their behalf to your distribution list; they provide the content and call to action in the email, and you provide the audience to whom it will be distributed.
Good Fit If: Email rental is appealing because it can fetch some premium rates; it isn’t uncommon to be able to charge $50 or more per 1,000 addresses on your distribution list. It can be good for your site if you have:
It’s unlikely that email marketing will be your primary source of revenue; this monetization source is often tapped in conjunction with display advertising or other methods listed here.
Bad Fit If: Email list rental won’t work if your audience isn’t willing to tolerate what are essentially third party ads being emailed to them. So if you don’t provide significant value to your list via email on a regular basis, pursuing this strategy could result in an extremely high unsubscribe rate.
How To Proceed: Email rental can be done through networks who hook you up with interested parties, or you can go directly to potential partners and attempt to cultivate a relationship without a middleman.
Bottom Line: If you can pull it off without driving a wave of unsubscribes or spam complaints, email list rental can be a very attractive and significant supplemental income stream. David Ronick at Inc. has a great article on the economics of e-newsletters, and Scott Hardigree has some good insights as well.
What It Is: Subscription revenue is generated by charging visitors to access content placed behind a “paywall.”
Good Fit If: Your ability to effectively make money off a subscription business depends on the quality of your product (i.e., is it worth paying for?), the size of your audience, and your marketing skills.
Bad Fit If: There’s a fairly high hurdle to clear here: your site has to have content or tools that users are willing to pay for. Just because you’re putting out content that users are happily consuming for free doesn’t mean that they’ll immediately fork over a monthly payment if you offer a premium package.
A subscription model might also be a bad idea if you’re making decent money on display ads; putting content behind a paywall means it gets fewer pageviews and lower ad revenue.
How To Proceed: Setting up a subscription site requires quite a big of behind-the-scenes work before you can accept payment. You’ll need to figure out how you’ll process user payments, what your pricing strategy will be, and what content and/or features will be behind your “paywall” (among many other details). MemberGate has a good checklist for adding a subscription business; Danny Sullivan also has some great insights on pricing models.
Bottom Line: Adding a subscription business on to your existing site can be a great opportunity to open up a lucrative revenue stream–provided that you have (or can build) a product worth paying for and have an audience capable of paying for it.
What It Is: Exactly what it sounds like: a store online (i.e., a section of your website) where users can buy branded merchandise.
Good Fit If: Opening up an online store might be a good move if you have a strong brand and an audience that identifies with it:
Bad Fit If: You have a transient audience. If visitors to your site are primarily from search engines and you have a low rate of repeat visitors, they’re unlikely to identify much with your brand or be willing to purchase anything from a store.
How To Proceed: Again, there’s a lot of work that goes in to setting up an online store. You’ll need to figure out how you’re going to make the merchandise, tackle shipping logistics, and of course nail down how you’ll be processing payments.
Side note: there is an easier alternative here that takes us back to the affiliate marketing concept above: an online store that simply links out to products offered by third parties. As an example, take a look at the Westeros Store, a fan site devoted to the popular Game of Thrones series. Their “store” features links to Amazon and HBO–meaning they’re making money without all the headaches associated with all the tasks mentioned above.
Bottom Line: For most publishers, this won’t be a big moneymaker. But it can be a nice supplemental revenue stream for sites with a strong brand and power users who like to show their support.
What It Is: A webinar or conference that users pay to attend and/or a sponsor pays to put on.
Good Fit If: Online events are tough to pull off, but can pull in some major dollars if you can find a relevant sponsor.
Bad Fit If: No one is going to show. Even if you have a relatively big audience, getting them to show up for a live event can be extremely challenging. Unfortunately, this is going to be the case for most publishers out there; no matter how big and targeted your audience is, and no matter how much they love you, they’re probably just not that interested in a webinar you host.
How To Proceed: Get to work lining up a content partner (if you decide to go with one) and, more importantly, a sponsor. Then be sure to fill those virtual seats so that you deliver value to everyone involved! Carol Tice at Entrepreneur.com has some good thoughts on making a webinar a success, and Andrew Spoeth at Marketo has some tips for increasing attendance.
Bottom Line: Online events are a lot of work. But the payoff can be huge; there’s an opportunity to make as much in a few hours as you usually do in a month if you can get the proper sponsors.
Below is a series of questions to ask yourself about your website, along with some direction to monetization methods depending on your answer:
Do you communicate regularly with your audience via email? Do you have a large collection of email addresses?
If “yes” to both, email list rental might be a good fit.
Do you have a high percentage of loyal “power users” — repeat visitors who come directly to your site?
If “yes” an online store, online events, or affiliate marketing could be worthwhile.
If “no” lead generation might be a good fit.
Is your audience considerably wealthier than the general Internet population?
If “yes” display advertising and email list rental could be your biggest opportunity.
What is the subject of your website?
If your site covers products (e.g., electronics or books) or includes a forum covering just about anything, affiliate marketing could be an opportunity. If your site touches any sort of professional services or big ticket item (e.g., insurance or weddings) lead generation could be profitable.
If your site caters to an audience that needs regular continuing education (CE) credits (e.g., psychologists or financial advisors) online events could be a moneymaker.
Do you have direct relationships with any potential advertisers or merchants?
If “yes” follow these relationships to a monetization method; if it’s a potential advertiser, get a display advertising arrangement set up. If it’s a merchant, kick off an affiliate marketing relationship.
Do you have any tips on how to monetize a website? Let us know in the comments!