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Week 8: Making Money Through Advertising, Part 1

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Loads of ads + plenty of users = tons of cash, right? Not necessarily. This article explains why many Web sites don't bring in advertising revenue, and how you can make sure that your site bucks that trend.
Web business engineering expert Nick V. Flor is the creator of Web Business Engineering.com, a Web business content forum, and the author of Web Business Engineering: Using Offline Activities to Drive Internet Strategies (Addison-Wesley, 2001, ISBN 0-201-60468-X). Professor Flor is a regular contributor to InformIT on Web business topics.

The best way to make money with your personal Web business is through advertising. Before you sign up with advertisers, though, it helps to know some jargon. To optimize revenues, before signing up with advertisers you also should analyze your Web pages and prepare a list of possible advertisements and ad placements. This article covers advertiser jargon and advertisement preparation activities. But first, the "Hacker Phrase of the Week."

Hacker Phrase of the Week

"This here X is a symbol of my individuality and of my belief in personal freedom!"

Usage: Whenever a friend or coworker makes fun of something you're wearing.

Example:

Wilma

Your shirt looks like a pajama top.

Fred

This here shirt is a symbol of my individuality and of my belief in personal freedom!

Introduction

If you've been doing the assignments in my previous articles, at this point you have a personal Web business with good autonomous content. However, before you start driving users to your site, you need to make sure that the mechanisms are in place so that you can make money from your traffic. Now, I'm not talking about adding some form of credit card payment to your site. As I mentioned in my first article on personal Web businesses, unless you have unique and valuable content or you've built up a fairly large community of users, the chances of people paying you to access your site's content are extremely slim.

The best way to make money in your personal Web business is through advertising. The general process works as shown in Figure 1:

Figure 1. The autonomous business model: advertising and payment (dashed lines).

  1. You sign up with advertisers.

  2. You place banners from those advertisers on your site.

  3. Users click these ads and either purchase or sign up for something.

  4. You get paid.

Sound simple? Sure. However, there's a saying: "For every problem there's a solution that's simple, elegant, and wrong." The way most Web sites implement advertising as a revenue model is—while not exactly wrong—at least sub-optimal, leading to very little money.

The secret to making good money with advertising is to sign up with the right advertisers and put their ads in the right places on your Web pages. Again, this sounds like a very straightforward activity, but there are several important details you need to get right if you want to be successful. This article examines several of these details.

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