Website Ads Don’t Add Up

Monetize, they said. It’s easy, they said. Just run ads, they said. And so, you added ads to your monetization strategy… and waited. And waited some more. Yet, those ad revenues still haven’t materialized, and that beach house of your dreams is still a castle in the sand. So what went wrong? (And who are “they,” anyway? But that’s another post.)

As it turns out, ads are just about the worst possible way to monetize. Ask yourself: When’s the last time you heard of a success story about a newspaper (you know, those dead trees with ink on them)?

No, you haven’t been drinking the leftover eggnog – you read that right: Ads don’t yield as much revenue as other other strategies.

Here’s where “they” get it wrong:

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  • The math just isn’t on your side. The click-through rate on most ads is about 1% – meaning that only 10 of every 1,000 visitors will bite (er, click). At $0.25 cents per click, you’d need at least 2,000 visitors per day to earn a whopping 5 bucks. You could add that much to your coffers by skipping your daily venti caramel macchiato. (Though granted, your day wouldn’t be quite as delicious)
  • Building up an audience big and relevant enough for advertisers to care about takes time and money. When you also consider the opportunity cost – what your money could have been doing instead – you easily could wind up looking at a negative ROI.
  • Yeah, yeah, so you’re a modern-day Hemingway. Still, churning out mind-blowing content on your own is expensive work in terms of time, effort, research (and beverages).

Ads Can Hurt You

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Ads aren’t just the meh of the monetization mix: They can be downright counterproductive.

  • If your audience is half as smart as you are, they’ll know you’re selling them out. And if your content doesn’t deliver on its promise, they’re going to feel downright cheated.
  • Content is worthless without carefully considered, strategically placed calls to action – those prompts that ask your audience for action (buy, download, join, etc.). Why, after all that effort of producing content with purpose, would you go and slap an ad or three on the page that draw attention away from them?
  • Ads also draw attention away from the content itself, rendering the time and money you invested in it worthless.
  • You might not be at liberty to select the ad content displayed on your page, and the potential to offend or annoy your audience is there. Ads for the equivalents of little blue pills and Chia pets are embarrassing.
  • Ads can scream “Amateur!” to influencers in your niche (whom you really need to impress).

But surely once you scale up and become a huge player, these factors shouldn’t apply to you… right?

 

Learn From the Big Players…

Back in the day, entrepreneurs typically figured if they built it, the audience would come – and then they’d figure out a monetization strategy. That’s never quite worked out, though, even for companies with sizeable investments from top-tier venture capitalists.

Take Twitter, for example. The company built an enormous user base but no monetization strategy. A decade in, Wall Street analysts are beating up on the company for still not making money.

“But what about ad-heavy sites like Huffington Post?” you might ask. Such huge properties have tens of thousands of daily visitors already loyal to the brand; they don’t suffer as much from the risks of monetization through ads. Advertisers are willing to pay for a spot there. Handsomely. Even still – still! – HuffPo remains more or less a break-even venture.

Print newspapers have fared no better, of course. Unable to harness the power of alternative monetization strategies the way their online counterparts can, their ad-driven model isn’t holding up too well these days.

 

The Better Path to Revenue

Direct monetization always wins out over ads-based monetization, and there are plenty of ways. For an audience of at least 1,000 visitors per day, here are just a few:

  • Sell goods directly to your audience. Your expertise in your niche is your main draw, so sell it in the form of books, reports, or other thought-leadership products
  • Got fans? Offer branded merchandise
  • Offer packaged engagements, like boot camps, consultations, and audits
  • Create a paid-membership club for your closest followers

Bottom line: Ignore what “they” say, and base your strategy on fact. Don’t rely on advertising to drive revenue. Instead, get creative and formulate a plan before worrying about traffic.