As part of a class project, I did a review of online advertising options for websites.
There are three main categories for online advertising.
The first revenue stream is based on the online advertising business model. Online advertising can be divided into three categories of advertising. The first is Cost Per Mille (CPM) or Pay Per Impression. This method of advertising relies on paying a specific amount of money based on the number of pageviews. The “Mille” refers to one thousand, which the the unit of measurement for this type of advertisement payment.
The second is is Cost per Click (CPC) or Pay Per Click (PPC) model. In this case, the revenue is generated when the website ad is clicked upon. It typically has a low conversion, but the costs associated with ad are higher. Figures I’ve been able to find put the conversion rate around 1.5-2% of pageviews will result in a click-through. I am honestly astonished that it is this high, but we’ll keep it there.
Finally, there is the Pay Per Action (PPA) model. To be paid for this type of advertising, the outcome of the advertisement must follow a specific path to achieve a desired outcome. For example, if a link takes a visitor to another site where they complete a purchase. Upon completion of the purchase, the ad will be considered successful. This model is the most difficult to track and measure, but is also the most lucrative. The site can sell ads directly and track this, or it can use an existing online ad infrastructure, such as Google AdSense.
Estimates for the AdSense revenue I have heard from a confidential source is roughly $0.007/pageview.
As an adventure, I decided to ad 1 Google AdSense banner ad. The great part is that you don’t get paid until you get to at least 1,000 PageViews.
So begins the race to 1000!
Come back in 10 years.