Making money with your blog and common terms used in advertising


The most obvious way to make money with a blog is through advertising, and as you might imagine, there is a very wide range of options, from text ads to banners, ad networks to private sales, video ads to audio ads; you name it, and someone has tried it as an ad system. But before you get too enthusiastic, you should know that making money from advertising is not easy.

Ad rates on the web tend to be quite low, particularly as there is so much ad space out there. With the explosion of websites and programs like Google's Adsense, which allow just about anyone to start running adverts, there is a ton of choice for advertisers looking for somewhere to show their brand.

That's not to say that you can't make money with advertising and in fact most of the biggest blogs use ads as their primary income source, however, it's important to recognize that it's not without its challenges.

The first hurdle you will need to overcome is volume. Advertising only really works at reasonably high volume. Let's say an advertiser is willing to pay USD 2 for every thousand times their ad is shown (a decent rate); then you will need to serve up 500,000 pageviews a month to bring in USD 1000 for that ad spot. Google Adsense blocks typically deliver fractions of a dollar per thousand impressions, so you can imagine you'd need an even greater volume of traffic to produce a meaningful income stream.

The second hurdle is having an audience that advertisers want to reach. For some blog niches, even Google Adsense can deliver reasonably high returns, while others are simply too broad, or too unappealing for advertisers. A great example that shows no one is immune to these issues, is the problem YouTube has in generating ad revenue across its very wide range of content. While popular videos are easily monetized, the site has had consistent problems generating revenue from its eclectic and at times rather bizarre range of videos.

If you can find either a very targeted audience that is attractive to advertisers, or a very high volume of traffic, or preferably both, then you can profit very well from advertising. As with all monetization strategies, it's best to do a lot of research, and then experiment extensively. Some common terms used in advertising are:

CPC – "Cost per click" ads pay every time a viewer clicks the advert. So, if you show an ad to a million people, but only five people click on it, then you'd get paid five times the CPC rate. So if an ad pays USD 0.25 CPC, then you'd need to have 4,000 people click on the ad to hit USD 1,000. And no, don't try clicking it yourself, there are ways to detect if the clicks are unique!

CPM – "Cost per thousand" impressions (the "M" in CPM stands for mille, which is Latin for thousand) is one of the most common methods of pricing advertisements. If an ad pays USD 2 CPM, then you will need to show 500,000 impressions to receive USD 1,000.

CPA – "Cost per action" is typically used in affiliate programs and refers to payments being tied to the user taking a specific action, such as signing up, or making a purchase.

eCPM – "effective CPM" is a term used particularly on Google's Adsense, but useful for publishers in general. It is a way of comparing earnings from different ad units, particularly if they haven't been shown for over a thousand impressions, or are using different payment models. So an ad unit shown 500 times, and having earned USD 1 through a Cost per Click (CPC) system, has an eCPM of USD 2, because if you extend it out you're going to end up with 1,000 impressions presumably earning USD 2 all together.

IAB Ad Sizes – The Internet Advertising Bureau has created a set of standard sizes that most ad networks and buyers will be looking for. Common sizes include the "Leaderboard" size, which is 728px wide and 90px high and the "Large Rectangle," which is 336px wide x 280px high.

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This article was sent to us by: Lane Shorman at 02172011

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