11 Oct 09 Monetizing Blogs: Understanding Online Advertising

There are many ways in which a blog or a website can monetize its traffic. Some of them are quite common and easy to do, while others are time consuming and more complex. When I say easy to do then I do not mean that you will not require to do anything and money will flow. I am sorry to break your heart and hope, but this simply is not possible. All I meant with “easy to do” is that enrolling in such networks is easy and making money takes less effort than it will in the complex mechanism like selling merchandise, e-books, courses, consultations, etc.

Advertisement is one of the easiest sources of website monetization tools for online publishers. It is arguably the biggest source of revenue generation for an online publisher. If a properly targeted advertisement is placed above the fold then the blog or website owner can even expect to earn living from his online property, provided his website or blog has enough traffic.

In the following posts, I will cover in detail the different types of online advertising networks available for the publishers. The categorization of ad networks in the following posts will be on the basis of visitors’ interaction with the ads, not on the basis of ad formats like banners, text links etc. I will not concern myself with the format of ads, but with the kind of interaction or response the ads want from our visitors. Before I sign off for the day, I should give you the classification of online advertisements on the basis of required response from customers.

Types of ad networks

The entire gamut of online advertisements can be classified into three categories, which are:

CPA (cost per action)
CPC (Cost per click)
CPM (Cost per thousand)

For now, keep this in mind and in the next post, I will tell you what CPA is and the post following that will discuss CPC and the final post in this mini-series will tell you about CPM. I will also give you names of the major players in each category.