When you create any new website, having that website pay for itself, or better still turn a profit is both a practical and even necessary goal. But how and when do you monetize your website and what strategy should you use? In this post I will explore various options that you can take to monetize your website, the pros and cons for each option and when you should implement them.
The most obvious form of monetizing a website is through advertising, ads can take many forms on a website from small text based ads to full size banners, pop ups, pop unders and intermediary pages.
Advertisement falls into two main categories, managed advertisement which is a service offered by companies such as Google with their Adsense program, and self-managed hosting. A managed service such as Adsense is generally easier to set up and is great if you run a website that is moderately trafficked around 1000 page views a month. The benefit to managed advertising programs is that they are virtually plug and play, you are removed from the burden of keeping track of advertisers and funds. The disadvantage being that they are generally pay per click meaning that unless a user clicks on an advertisement you don’t profit.
By contrast a self-managed advertising program is a program that you manage yourself. You can do this with specialized software, or by hand. When you run your own advertising campaign you are responsible for collecting money, rotating the advertisement and making sure you continue to add new a fresh content. The trade-off is any profits you make go directly to you regardless of how many click throughs you get. The hardest part of managing your own program is you need to have a proven reputation, or have high enough traffic to convince potential advertisers to advertise with your site. These programs are best kept to sites that are well known in the community, or have 10,000 views of better.
The advantages to advertisements are they are well known and consistent sources of revenue on websites that are well trafficked. When you use a managed advertising service you can have ads running on your site in very little time and with very little interaction on your part allowing you to focus on developing the site and focusing on content. This is great for sites that have a small or single person development team.
Further once your website grows you can start running your own advertisement system, or run a hybrid of both.
Another popular way to make money from your website is through paid subscriptions. Subscription services require that you provide a service for profit, that people will be willing to pay for. Many content based websites offer paid subscriptions to hide the advertisements available for their websites. This can be especially beneficial to highly trafficked websites where you have a somewhat loyal fan following that would see the benefit in supporting the author.
You have to be careful when choosing to allow paid subscriptions to remove ads, some advertisement agencies may not support this risking cancellation of your contract with them and other penalties, and you users may see this as an attempt to make money from them without providing a real service. If you do choose to go this route, it would also be helpful to provide some other kind of reward.
Other companies that offer subscriptions do so through what is commonly called a pay-wall. This basically means you have content that is subscriber only that they must pay for to see. You can see examples of this on popular news websites as well as a few higher profile blogging websites. When using paywalls you need to be careful to have strong enough public content to attract an audience, and make them willing to pay to read additional content.
Subscription services, and support
Another popular way to offer subscriptions is through services or support. You may offer an online application that you want users to pay for, or offer paid support services for a product or service you run. When running a paid service online, it is wise to carefully consider whether to make it subscription only or have a free version, and if it is subscription only possibly having a trial version.
The e-commerce world well maturing is still very much in it’s infancy, and people are very reluctant to part with their money on services they are not familiar to them, and services they have not have an opportunity to try. By offering a free version, or a trial version you are luring potential customers in, and giving them a reason to want to invest in your product.
If you run a website that provides free content (free as in free to use) and free (as in no cost), whether that is literature, graphics, software, or many other genres; Or run a website as a charity, or other non-profit, then there is a good chance that donations would work well on your website. Donations as the name implies is a chance for the user to contribute financially for the service or product you provided.
When making the decision to accept donations consider some of the following questions
- Do a run a website that is for profit?
- If your website turns a profit through sales, or subscriptions then it is very likely donations are not a good fit for your website, many times users will see this as misleading or even greedy.
- Does your website contribute in some way to the community?
- I use community very loosely here, and what I mean is does your website contribute to the community that your target audience is a part of. That could mean your town/city, country, or profession. Contributions to the open source community, or literature, or graphics community for example are great examples.
- Is my website a recognized Charity or Non-profit
- Charities, and even non-profits can offer tax incentives to people who decide to donate to their cause, offering the option for people to donate online for these types of services can be a great supplement to existing income streams for your organization.
If you do decide to have a donate button on your website, it’s important that it’s non-intrusive but visible. People want to know they have the option to donate, but not feel like they are being pressured or forced to do so.
If you offer a product or service online one of the best ways to monetize this is through the use of a shopping cart. A shopping cart is a piece of software designed to emulate the experience of a “brick-and-mortar” store allowing people to select any number of items and purchase them all from your website.
In the early days of e-commerce, people were very reluctant to purchase items using the internet, however with the rapid growth of online retailers such as Amazon, and the online presence being offered by brick-and-mortar giants such as Walmart, online shopping and the idea of a shopping cart are becoming common place.
Setting up a shopping cart can be a very involved process depending on the route you want to go, however plenty of solutions exist online to make the experience easier. Depending on your budget, skill set, and how much customization you want you can have a shopping cart up and running in minutes.
How do I collect money online?
The easiest way to collect payments online is through a payment gateway such as Paypal. The benefits to using a popular payment gateway is that much of your audience will likely be familiar with it, and also comfortable to use it. Paypal also links to your bank account allowing you to transfer funds to your personal or business account relatively easily. Paypal’s fees are also quiet low making it a fairly inexpensive process to start accepting payment online. However there are disadvantages to using Paypal, one of the most common problems is Paypal may freeze your funds if you have a dispute, offering little recourse to dispute, also Paypal makes contacting the company quite difficult. While paypal is probably fine for the majority of sites, below are some of the alternatives available.
One of the more popular alternatives to Paypal is 2CheckOut. Some of the advantages of working with 2Checkout are it’s well supported, many shopping carts come with support built on or have plugins that you can quickly install. 2CheckOut is also much more welcoming of support inquires and has a robust support portal as well as a phone number on their website.
Google Checkout is one of the closest payment gateways to Paypal, it’s quick and easy to set up and does not require a review process. Google also processes payments quiet quickly, and unlike Paypal where funds are held until you request them, Google sends your funds to your bank account automatically.
The most important thing to remember with any online venture is that your content must come first. Many people get far too carried away with trying to monetize and build an experience that is no longer attractive to the user. With the amount of competition online pushing customers away with a poor customer experience is now not just unacceptable but could also make or break your website and your business.
However done effectively and at the right time with input from your customers, you can have a website that really does meet your profit expectations.