How To Start & Grow Your Business

4 Ways to Make Money Blogging on Your Website

Asher Fergusson
Dec 22nd, 2015
  • Estimated reading time: 8 min read
  • Hummy's
    Highlights

    1As traffic grows, shift from Adsense to direct ads. 2Affiliate programs earn you sales commission. 3A phenomenal site can thrive on membership revenue.
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Advertising

Startups-American dollars grow from the ground Photo Credit: Nomad_Soul Shutterstock

If you’re thinking of starting a content driven website/blog (or already have one), you’re probably wondering if Google Adsense (or other such ad networks) can be a reliable revenue source in your early years?

The short answer is NO.

Below I will explore different ways of how to make money from blogging based on my personal experience and research over the past 6 years. I have websites that are: purely adsense driven, only affiliate marketing driven, premium subscriptions and sites that employ a combination of all possible monetization methods.

1) Google Adsense

Google Adsense is the most popular blogging revenue generator on the Internet – it is super simple to setup and gives instant access to Google’s gargantuan ad network. Let’s crunch some numbers. I am using this calculator which bases its numbers on: “a click through (CTR) of 1.5%, which is the average CTR across most websites. The Google Adsense income calculator also assumes that each page displaying Google Adsense ads will have 2 Ad units is positioned above the fold on the page.”

I did a few different calculations all with the parameter of 1000 page views. Here are the results per niche that I’m interested in (note: they look a bit too high to me):

  • Webhosting: $5
  • B2B: $15
  • Technology: $10
  • Legal: $40
  • Banking & Finance: $30
  • IT & Hardware: $15
  • Random blogs: $1

Let’s assume a conservative average is $10 per 1000 page views. If we got 100,000 unique visitors per month with an average of 3.5 page views per user then we are working with 350,000 page views/ month. 350,000 / 1000 = 350 x $10 = $3500/ month. Clearly (unless you’re a one man show) Google Adsense is not a viable revenue generator for your business until you have mega traffic. For fun I’ve included the most expensive keyword niches at the bottom of this article. Knowing these keywords may influence which keywords to focus on when creating your content.

This graphic below is showing where Google made most of its money in 2011 (see the full size info graphic here).
Screen Shot 2014-10-22 at 12.01.47 PM

Initially you should not count on any revenue from Google Adsense until you have significant traffic e.g. +1,000,000 page views/ month. I personally despise ads, especially the ones that flash or have no relevance to the content I’m viewing. In fact, I use Ad Block so I don’t even have to see ads.

2) Direct Ads

The general rule with direct ads is that it can be worth it once you are either generating enough website traffic or enough revenue from Google Adsense. E.g. if you make $6,800/ month from Adsense then you’re effectively paying Google $3,200/ month to do ad sales for you. At this point it may be worth bringing it more or partially in house. With this said, if the site is specific enough to a niche with a common interest community then advertisers are more likely to want to go directly to the publisher to advertise. It is important that advertisers in your niche are already actively spending online in order for them to be viable partners with direct ad sales on your site. Selling directly to advertisers is easier said than done. It can be difficult to reach the decision maker and therefore get anywhere with direct ads. The bottom line is that it can be the most profitable form of display ads on your website but requires careful thought and planning. Click here for further reading on this subject.

Here are some sites that help with direct ad sales (you will need to contact most of them in order to get pricing):

Here are some tips in order to get direct ads on your website.

  • Just start with anyone at any price.
  • Create an advertiser page with demographics and statistics.
  • Tell the advertiser why they should advertise with you.
  • Let the company know exactly what they are getting.

3) Affiliate Marketing

Affiliate marketing can be a very lucrative business. Entire empires of spammy SEO sites have been created in order to make money with affiliate marketing and have often given it a bad name. If done correctly with strong relevance and quality products/services it can be a great way to make more money on your website or blog. For example, the smart passive income blog (a one man show) is making almost $100,000/month from affiliate marketing and he shows you exactly where the revenue comes from each month. The guy behind that site makes a lot of that money from referring people to the web host, BlueHost, who pays at least $60/sale that you refer to them.

This graphic below explains how affiliate programs work.

how-affiliate-marketing-works1

Below are some calculations based on typical affiliate marketing numbers.

Assuming 350,000 page views/month, 1% Click through rate, 5% conversion rate, $30 payout from affiliate:
350,000 x 1% (CTR) = 3500
3500 x 5% (CR) = 175
175 x $30 = $5,250/month

Click here for further reading.

4) Premium Membership or Subscriptions

In my opinion, premium membership is usually the best business model for startups or any web business to be profitable over the short and long term. If you focus on an exceptional product or service with phenomenal customer service then people are happy to pay a few bucks per month for an ad free service. E.g. 100,000 members paying $2/month = $200,000/month (a nice chunk of change).

If you’re a Software as a Service (SaaS) business then this article is a must read: Freemium vs Free Trial

The article explains the “Freemium” business model where you give part or all of your content away free forever with the expectation that a small percentage of these people will pay for Premium only content or service. They say that where Freemium is most appropriate and where success is at least possible, is when your market is huge AND those who use your offering FOR FREE FOREVER will add value – hopefully exponentially more over time – to you and the other users and paying customers. If they don’t add value, then you’re just running a charity. Charities are great, but not when you set out to run a for-profit business…

Most successful Freemium models have conversion rates of 2% – 5%. E.g. if you could get 100,000 members for the free site you could expect to get 2,000 members to pay, let’s say, $5/month = $10,000/month.

evernote-logo-designAn extremely successful SaaS Freemium example is Evernote“The workspace for your life’s work”. Here is a very compelling 25min video from the CEO of Evernote where he shares many rare insights and graphs into the growth of Evernote which now has over 100 million users.

Evernote revenue sources:
Premium subscriptions = 86%
Ads = 4%
Technology license = 10%

Notice how most of their revenue is from premium subscriptions not from ads? With that said by now they are making millions of dollars per year with ads but it’s not how they succeeded, instead it’s just icing on the cake.

Conclusion

Don’t start a website or blog thinking that you’ll get rich from throwing up some annoying ads. Instead, focus on quality content, great products and stellar customer service. Consistency is key. All big successful websites on the Internet did not get to where they are overnight – it was years and years of hard work and dedication. Another good tip is to only create a site on a subject that you are very passionate about – that way you will stick with it longer and probably create better content.

Good luck and have fun with it!

Lastly, below are some stats that are interesting to see and may be useful for helping you to choose profitable niches to run some Google Adsense ads on 🙂

where-does-google-make-its-money

Click to enlarge

20 Most Expensive Keyword niches in Google Adwords (specific keyword phrases can be over $170/click!)

  1. Insurance – Top CPC $ 54.91
  2. Loans – Top CPC $ 44.28
  3. Mortgage – Top CPC $ 47.12
  4. Attorney – Top CPC$ 47.07
  5. Credit – Top CPC$ 36.06
  6. Lawyer – Top CPC$ 42.51
  7. Donate – Top CPC$ 42.71
  8. Degree –Top CPC $ 42.02
  9. Hosting –Top CPC $ 31.91
  10. Claim – Top CPC$ 45.51
  11. Conference Call –Top CPC $ 42.05
  12. Trading –Top CPC $ 33.19
  13. Software – Top CPC$ 35.29
  14. Recovery – Top CPC$ 42.03
  15. Transfer – Top CPC$ 29.86
  16. Gas/Electricity – Top CPC$ 54.62
  17. Classes –Top CPC $ 35.04
  18. Rehab – Top CPC $ 33.59
  19. Treatment –Top CPC $ 37.18
  20. Cord Blood –Top CPC $ 27.80

10 Top Industries Contributing to Google’s AdWord Revenue:

  1. Finance & Insurance – $4.0 Billion
  2. Retailers & General Merchandise – $2.8
  3. Billion Travel & Tourism – $2.4 Billion
  4. Jobs & Education – $2.2 Billion
  5. Home & Garden— $2.1 Billion
  6. Computer & Consumer Electronics – $2.0 Billion
  7. Vehicles – $2.0 Billion
  8. Internet & Telecommunications – $1.7 Billion
  9. Business & Industrial – $1.6 Billion
  10. Occasions & Gifts – $1.2 Billion

70 Highest Paying Keywords for Google Adsense

  1. Mesothelioma law firm ($ 179.01)
  2. Donate car to charity california ($130.25)
  3. Donate car for tax credit ($126.65)
  4. Donate cars in ma ($125.58)
  5. Donate your car sacramento ($118.20)
  6. How to donate a car in california ($111.21)
  7. Sell annuity payment ( $ 107.46 )
  8. Donate your car for kids ($106.01)
  9. Asbestos lawyers ( $ 105.84 )
  10. Structured annuity settlement ($100.8)
  11. Annuity settlements ($ 100.72 )
  12. Car insurance quotes colorado ($100.93)
  13. Nunavut culture ($99.52)
  14. Dayton freight lines ($99.39)
  15. Harddrive data recovery services ($98.59)
  16. Donate a car in maryland ($98.51)
  17. Motor replacements ($98.43)
  18. Cheap domain registration hosting ($98.39)
  19. Donating a car in maryland ($98.20)
  20. Donate cars illinois ($98.13)
  21. Criminal defense attorneys florida ($98.07)
  22. Best criminal lawyer in arizona ($97.93)
  23. Car insurance quotes utah ($97.92)
  24. Life insurance co lincoln ($97.07)
  25. Holland michigan college ($95.74)
  26. Online motor insurance quotes ($95.73)
  27. Online colleges ($95.65)
  28. Paperport promotional code ($95.13)
  29. Onlineclasses ($95.06)
  30. World trade center footage ($95.02)
  31. Massage school dallas texas ($94.90)
  32. Psychic for free ($94.61)
  33. Donate old cars to charity ($94.55)
  34. Low credit line credit cards ($94.49)
  35. Dallas mesothelioma attorneys ($94.33)
  36. Car insurance quotes mn ($94.29)
  37. Donate your car for money ($94.01)
  38. Cheap auto insurance in va ($93.84)
  39. Met auto ($93.70)
  40. Forensics online course ($93.51)
  41. Home phone internet bundle ($93.32)
  42. Donating used cars to charity ($93.17)
  43. Phd in counseling education ($92.99)
  44. Neuson ($92.89)
  45. Car insurance quotes pa ($92.88)
  46. Royalty free images stock ($92.76)
  47. Car insurance in south dakota ($92.72)
  48. Email bulk service ($92.55)
  49. Webex costs ($92.38)
  50. Cheap car insurance for ladies ($92.23)
  51. Cheap car insurance in virginia ($92.03)
  52. Register free domains ($92.03)
  53. Better conferencing calls ($91.44)
  54. Futuristic architecture ($91.44)
  55. Mortgage adviser ($91.29)
  56. Car donate ($ 88.26 )
  57. Virtual data rooms ($ 83.18 )
  58. Automobile accident attorney ($ 76.57 )
  59. Auto accident attorney ($ 75.64 )
  60. Car accident lawyers ($ 75.17 )
  61. Data recovery raid ( $ 73.22)
  62. Motor insurance quotes ($ 68.61 )
  63. Personal injury lawyer ($ 66.53)
  64. Car insurance quotes ($ 61.03)
  65. Asbestos lung cancer ($60.96)
  66. Injury lawyers ($60.79)
  67. Personal injury law firm ($60.56)
  68. Online criminal justice degree ($60.4)
  69. Car insurance companies ($ 58.66 )
  70. Business voip solutions ($ 51.9 )

About the Author

Asher Fergusson

Asher has a Master's in Business Administration (MBA) degree and was the CEO of his own startup Internet marketing business for 6 years before selling it in 2014. He specializes in fields such as Search Engine Optimization and Facebook Advertising where he's helped countless small businesses successfully compete with large corporations. He is now the full-time CMO at bizHUMM sharing all his knowledge of how to start and grow small businesses in the most powerful and cost effective ways.