Website advertising has gone through many changes over the time that the internet has matured. What started as a simple system has become more complex and advanced with varying models and tracking systems.
However, despite the changes, internet advertising still comes down to one thing: getting your call to action (CTA) in front of the right audience.
If your website represents a B2B company or a more traditional business, you may not have a reason to consider allowing advertising on your website. However, if your website is for a non-profit or is an informational site, you may someday be approached by advertisers or sponsors who want to pay you for visibility on your website (or maybe this has already happened).
It's very common for a non-profit to feature sponsors on its website or for a publication to accept advertisers. While the major publications already have advanced systems and policies for handling advertising, smaller organizations are often left confused when approach by potential advertisers because they aren't sure how all this is supposed to work.
Have no fear. We will dig into four common website advertising models and discuss how they work.
Pay Per Month (Or Specific Time Period)
We'll start with the easiest and most predictable model: pay per month. You can charge the advertiser for running their CTA during a specific time frame, usually by the month. This model is very predictable because you are charging a fixed fee for a specific time period no matter how well the CTA performs.
This puts the least risk on you and most risk on the advertiser. If the CTA performs poorly either due to low website traffic or low click rate, then the advertiser does not get much value and still has to pay the agreed-upon rate.
However, if the CTA performs very well (perhaps you get a spike in website traffic), then the advertiser could end up getting more value but still only committed to a fixed fee. If this happens, then the advertiser has gotten even more value than they paid for while you still only get the agreed-upon fixed fee.
By taking on more risk, the advertiser has the potential to get a greater reward if things go well.
Pay Per Impression
In the pay per impression model, you (the website owner) agree to charge the advertiser by the impression. This means that any time the advertiser's CTA is viewed, an impression is counted and added to the total. Each impression adds to the total bill to the advertiser.
This is still a fairly low-risk model for you because you are basing the fee on your average website traffic and as long as that traffic stays pretty consistent you should be able to predict how many impressions you will end up with.
The advertiser is taking on some risk, as well, because they may end up paying more if you have a spike in website traffic which means more impressions. Ideally, however, this would also be a benefit to the advertiser because their CTA gets more visibility.
The pay per click model is a popular method of tracking advertising and it is a great balance point when it comes to risk. In this model, the advertiser only pays you when someone clicks on the advertiser's CTA. This is a very reasonable model for the advertiser because they are only paying when they get a real "lead" to their website.
Depending on the rate, it can also be good for you but is much less predictable since you don't really know how many people are going to click on the CTA.
Just like pay per impression, clicks are usually tracked in the CMS of your website.
Pay Per Conversion (Affiliate Model)
The last advertising model that we'll talk about is the affiliate model. This is pretty high-risk on your part because it relies on website visitors actually completing an action. This is usually done when the advertiser wants to promote an event or a website sale (e-commerce).
As an affiliate, you place the CTA on your website but you only get paid when someone clicks the CTA and then completes the conversion on the advertiser's website. This conversion can be an event registration, a product purchase, or simply a form filled out.
In the affiliate model, you are normally paid a percentage on each conversion (20%+ is not uncommon). This has the potential to result in more revenue than the other advertising models but can also be much lower. It's pretty high-risk for you because once the visitors leave your website, you're at the mercy of the advertiser to provide a good experience to convert them.
So which model is best for you? Of course... it depends. It depends on how much website traffic you get, how much effort you want to put into promoting the advertiser, how well-designed the advertiser's website is and how willing you are to accept variable or unknown payout.
If you want a predictable, low-effort arrangement go with the fixed-fee fixed-time model. If you want to try for more revenue and are willing to put more effort into it, you may want to consider the affiliate model.
Don't be afraid to experiment and try different arrangements to see what works best for you. If you have advertisers that want to pay you to promote them, it means you're doing something right.