Making Money Online With Ads

One of the most popular and
least successful models I see in
new business plans for startups
is the so-called Facebook model,
providing free services to users
while collecting revenue from
ads to offset costs and grow the
business. To make this work,
you need heavy traffic on your
site -- probably at least a million
page views per month -- which
most sites never achieve in their
lifetimes.
That’s an especially tough
challenge in your first year or
two of operation, even if you
use every technique known to
get traffic flowing. While you
are doing all this work, of
course, you need deep pockets
to fund all your efforts,
content and growing website
hosting fees. When Facebook
did it a few years ago, the
company used more than $100
million in venture
capital funding before it became
profitable.
Related: The Web's Most
Effective Ads
It helps to understand how
online advertising really works.
When I first took a look at it, I
was overwhelmed by all the
terminology and acronyms, so I
spent some time sorting it out
and simplifying it for aspiring
entrepreneurs and the rest of
us:
1. A site owner gets paid
when a visitor clicks on
an ad.
This model, called pay per click
(PPC), is the one most
commonly offered to
entrepreneurs. For the
advertiser, this is the cost-per-
click (CPC) model. The goal is
for your visitor to be redirected
to the site or product being
advertised. The average click-
through rate hovers around
5 percent, with a payment of a
few cents for each, so don’t
expect to get rich quick on this
one.
2. Get paid every time
an ad is displayed on
your site.
With this model, advertisers pay
for the number of times an ad
is shown regardless of whether
it is clicked on. Technically, this
is called pay per view (PPV), pay
per impression (PPI) or pay per
mille (PPM), which is a
thousand impressions.
Advertisers see this as cost per
impression (CPI) or cost per
mille (CPM). Advertisers pay
even less for this one, since they
don’t like to pay when your
visitor ignores their ads.
3. Your visitor must
take action on ad
before payment.
With this variation, no payment
comes to you until your visitor
get redirected to the ad site and
performs a desired action there,
such as filling out a registration
form. This is called pay per
action (PPA) or pay per lead
(PPL). The advertiser sees it as
cost per acquisition (CPA) or pay
per performance (PPP). This
model arose a few years ago to
mitigate the risks of click fraud.
Related: 5 Ways to Make Your
Online Ads More Clickable
4. Share of revenue
from ad action initiated
by your visitors.
This is a variation of the
preceding model, called
performance-based
compensation. It has the best
potential to maximize your
income, but the results are
totally unpredictable.
Advertisers see it as a method
of shifting the risk on untested
ads or products to you, so do
your homework.
5. Fixed compensation
rate for a specified time
period.
This approach is the most
predictable way to anticipate
revenue from advertisers. You
simply negotiate a fixed price
per day for displaying the ad on
your site, which advertisers see
as cost per day (CPD),
independent of the ad’s
visibility or your visitor
response. But rest assured that
the advertiser will be
measuring results, so a long-
term revenue stream is not so
predictable.
It’s also important to know that
advertising delivery technology
has come a long way in the past
few years. The ads you see from
day to day may change as your
site content changes, and every
visitor may see a different
ad based on their profile and
interests. Now ad space is often
auctioned to the highest bidder
in the few milliseconds while
your page is being built.
But all this doesn’t change the
reality that it’s hard to make
any money on ads in the early
days of a new startup. Even
Facebook required nearly five
years and 300 million users
before it became cash-flow
positive from advertising. With
the competition today for ads
on popular sites such as Twitter,
the probability of new sites
building a big revenue stream
from ads is even lower.
So if you want to make money
like Facebook from ads, your
first step is to grow a very large
visitor base, funded by a
revenue stream other than
advertising, or investors with a
strong ongoing commitment to
your success. In other words,
it’s time to think of advertising
revenue as a benefit of your
success, not the source of it.

you can get started here

This post was taken from this site https://traffic.spot.im/v2#to_url%3Dhttps%253A%252F%252Fwww.entrepreneur.com%252Fslideshow%252F300732%253Futm_source%253Dspotim%2526utm_medium%253Dspotim_recirculation%2526spotim_referrer%253Drecirculation%26from_spot%3Ds