Not all websites are e-commerce sites that generate revenues by selling a product. In fact, many sites are simply about sharing ideas and information. The question arises, how does one generate revenue from an information site? If a site is not about selling products but rather sharing information, there are two primary methods available for generating revenues. The first is making the site paid subscription based. The other is to use paid advertising on the site.
Unless a site has very compelling and unique content, a subscription only revenue generation method is doomed to failure because people are not used to having to pay to access content. As a result, paid advertising is the predominate business model for generating revenue for information sites. More recently, it has become common for paid advertising to be the primary revenue generation method with users being able to pay a subscription fee to be able to access an advertising free version of a website that has premium content.
There are three primary methods used to acquire paid advertisers for a website:
Selling adverting directly to potential advertisers is the hardest method of finding paid advertisers and should only be considered if either the site is very popular (e.g. has in excess of 1,000,000 page views per month) or is of a very regional focus (e.g. a travel site) and advertising could be sold to local merchants. The disadvantage to this method is that it is very labor intensive.
With a third party broker, the broker is responsible for acquiring different advertisers who will advertise on websites the broker represents. This can work in different ways. For smaller sites, traditionally the broker, worked out deals with advertisers and provided the website publisher with a list of different advertisers who had banners to display. The publisher would then review the terms and rates each advertiser was offering and choose which banners from which advertisers they would place on their site. A newer method that has become available to small or lower traffic websites is content sensitive advertising, whereby the broker automatically chooses, which ads to place on any given webpage based on the content of the webpage.
Many merchants use their own affiliate programs rather than depend upon a third-party broker. This is especially popular among e-commerce sites like Amazon.com. The advantage for the merchant and web publisher is that it cuts out the expense of a middle man and enables the merchant to create a more robust program where the publisher can promote specific items on their website (like our book recommendations to the right).
