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How to Monetize Your Website: Advertising vs Digital Products?
There’s more to deciding how to monetize your website than “the uninitiated” may realize. Navigating this decision can be remarkably overwhelming the first couple of times you face it.
For the sake of this article, we’re going to stick to the most common monetization methods most people find themselves considering:
- Placing display advertising on your website
- Promoting digital products on your website (yours or someone else’s via affiliate marketing)
Having monetized well over two dozen websites throughout my 16-year blogging & affiliate marketing career, I’m happy to share what I’ve learned so you’re more likely to “get it right the first time” than I was.
Let’s take a detailed look at the advantages and disadvantages of website monetization via advertising vs. digital products:
Placing Advertising on Your Website: Advantages
There’s one gigantic advantage to monetizing your website with advertising: it’s easy.
Many-a-millionaire have been made since the advent of Google Adsense almost two decades ago, and with the birth of higher-paying platforms such as Ezoic and MediaVine, display advertising has become a viable way to make money from your website traffic even if you don’t have the monstrous numbers of visitors that Google Adsense legends boasted over the years.
Don’t get me wrong — there’s still testing, tweaking, and optimization involved, but compared to building out and constantly testing/optimizing a sales funnel designed to promote digital products, monetization via advertising is much simpler.
Plus, you don’t have to concern yourself with a website visitor’s intent. If your website makes money by selling digital products (a form of cost per acquisition marketing A.K.A. “CPA marketing”), visitor intent is tremendously important, and all traffic is not created equal. If a visitor isn’t likely to make a purchase, that keyword isn’t very valuable to you.
When your site is monetized using advertising, eyeballs are eyeballs. You’re going to get paid regardless of their intent because you’re paid per thousand impressions (CPM), not based on a visitor’s action.
This significantly lowers the barrier to making money as a digital publisher. Whereas someone monetizing their website via digital products not only needs to get traffic to their site, but then also convert that traffic into some form of action which requires a “Swiss Army knife” of skills (conversion optimization, data analysis, sales copywriting, email marketing, and more) — the publisher who chooses to monetize using advertising is done as soon as the traffic gets to their website!
Placing Advertising on Your Website: Disadvantages
With a pitch like that, why would anyone choose NOT to monetize their website via advertising? It sounds like the internet entrepreneur’s dream: set it and forget it!
Even with better-paying advertising networks, you still need some form of traffic multiple (i.e. 10x the traffic) vs. a competitor monetized using digital products to generate the same amount of revenue. This is best illustrated with an example:
Let’s say the CPM (cost per thousand impressions) for your website was $20 (somewhat generous). That means for every thousand visitors to your website, you’re generating $20.
Now let’s say a competing publisher in the same niche was monetizing their traffic via digital products. Even if they only converted one in one thousand visitors (a fairly dismal 0.1% conversion rate), as long as their value per conversion was over $20, they’re keeping pace with you.
Let’s dig into this a bit further…
Selling Digital Products on Your Website: Advantages
Regardless of whether you’re selling digital products that you own or you’re promoting digital products that another publisher fulfills & maintains as an affiliate, there are some significant advantages to this path of monetization.
Let’s turn back to our example: let’s say both you and your competitor receive 30,000 visitors per month (roughly 1K daily). Your competitor is monetizing via advertising, which even assuming a somewhat generous $20 CPM, means they’re making:
30,000 visitors / 1,000 (they’re paid per thousand) = 30 x $20 (their CPM) = $600
Not bad! But let’s assume you’re getting a slightly better than “dismal” conversion rate monetizing via digital products, and that your commission was $50 per conversion instead of just $20 (which shouldn’t be difficult to find in most niches):
30,000 visitors / 0.3% (a below-average conversion rate) = 90 x $50 (commission/sale) = $4,500
Oof — that’s a punch to the gut if you’re the website owner monetizing your website’s traffic using advertising.
The product publisher who’s chosen the “set and forget” form of monetization, display advertising, is leaving $3,900 per month on the table. If we look at that on a value per website visitor level:
- Display advertising = $0.02 per visitor
- Digital products = $0.15 per visitor
That’s considering a fairly rosy CPM for the product publisher who’s monetizing via advertising, and numbers that could be beaten fairly easily with a series of split tests and experiments by the website owner monetizing their site using digital products.
As this exercise illustrates, just like any other profession: the more skilled you are, the higher your earning potential. Someone who can simply get traffic and place advertisements on their website will underperform compared to a well-rounded marketer who can competently get traffic, optimize for conversions, write sales copy that influences their visitors to take action, and more.
Additionally, whereas a publisher monetizing their website using advertising only has a handful of “levers” in their business that they can manipulate to increase revenue:
- Increase traffic
- Increase pages/visit
- Maximize & optimize ad placement
A publisher monetizing their website using digital products has a LONG list of levers that, when optimized, compound with all of the improvements & conversion opportunities “downstream” (i.e. lower on the list):
- Increase traffic
- Improve the conversion rate to key conversion pages (# of visits to page)
- Improve the conversion rate of key conversion pages (# of conversions on page)
- Increase the commission they’re paid by the publisher, or promote a different product with a higher commission
- Build an email list for higher conversion rates and higher lifetime value (LTV) by promoting other offers
- Improve the opt-in rate to the email list
- Improve the open rate of emails
- Improve the click-through rate of emails
Which complicates the path to revenue quite a bit, but as the example above illustrates: you’ll be rewarded handsomely for your efforts.
There are drawbacks to monetizing via digital products, however, as well as ways to fail before the website visitor even arrives at your website, which you should be made aware of…
Selling Digital Products on Your Website: Disadvantages
As mentioned earlier in this article, visitor intent plays a HUGE role in how likely digital product monetization is to succeed or fail on your website.
The closer a visitor is to making a purchase decision (i.e. the further along they are in the buying cycle), the more likely they are to convert on your website.
This is the main reason review-based keywords (e.g. computer reviews, makeup reviews, online membership site reviews, etc.) are so competitive & desirable: the visitor has concluded that they want to make a purchase — they’re just trying to settle on which product they’re going to buy.
Contrast this against a visitor who is higher up in the buying cycle: (e.g. “why is my computer slow,” “makeup that’s good for your skin,” “learn how to play guitar,” etc.). These visitors are significantly more difficult to convert due to how far away they are from making a purchase.
These visitors still need to be educated, introduced to a solution, and then convinced to buy the website owner’s proposed solution before they represent any revenue.
With website visitors like this who are earlier in the buying cycle, the publisher who monetized their content using advertising at least gets paid a penny or two for these visits, whereas the publisher monetizing with digital products is compensated on an “all or nothing” model, and they’re significantly less likely to generate revenue from top-of-funnel traffic than they are middle or bottom-of-funnel.
None of the above even considers the worst case scenario: traffic that has absolutely zero purchase intent. It doesn’t matter how hard you try, certain visitors aren’t going to make a purchase on your website.
Think about people looking up inspirational quotes, news, song lyrics, etc. Except for very rare “flukes” where you may get lucky, this traffic is very difficult to monetize using CPA marketing because they’re not coming to your site with a question or a pain point they’re trying to solve through a purchase — they just want to get a nugget of information and leave your website!
This, again, is a scenario where the publisher paid via display ads at least generates some revenue, whereas a publisher paid via digital product sales gets paid nothing.
Finally, as the earlier example demonstrates: you need to develop competency in a lot of different skills if you want to maximize your website’s revenue potential via digital product sales, or any other form of CPA marketing for that matter (selling physical products, generating leads, etc.).
If you’re not seriously devoted to your craft as a blogger or affiliate marketer, you might always come out ahead focusing exclusively on traffic generation and monetizing via advertising vs. a website owner who makes money by optimizing all of the “levers” available to a skilled affiliate or product publisher.
Which Is Best for YOU: Advertising or Digital Products?
Hopefully all of the details and examples above get you closer to answering this question, but nobody can answer this question accurately but you.
The answer depends strongly upon:
- How long have you been doing this?
- If it’s your “first rodeo,” you might benefit from not complicating things too much at this stage, which would mean monetizing via advertising for at least the first few weeks or months.
- Whether your traffic is looking to make a purchase to answer their question or solve their pain point.
- Skews towards digital product sales if so, display advertising if not.
- Whether you have a lot of traffic…
- Display advertising may generate a lot of revenue, vs…
- Only a few hundred visitors per day.
- Digital product sales may provide significantly higher earning potential.
- How devoted you are to developing competency across multiple skills.
- Looking for “set & forget”? Advertising is probably your best bet.
- Looking to become a well-rounded, highly skilled marketer? Your efforts will be rewarded over time with significantly higher revenue than your competitors who are monetizing their traffic using advertising.
I’ve been studying, learning, and improving my skills as a blogger and affiliate marketer for 16 years. It was a long journey, and it took A LOT longer to achieve the levels of success I wanted in this industry because I developed a wide breadth of skills vs. focusing exclusively on traffic generation.
Had I just focused on traffic generation and monetization via advertising, I wouldn’t be the Marketing Co-Founder of a multimillion-dollar startup and I wouldn’t have remotely the career security I have now. Does that mean the path I chose is the “better” path? Absolutely not! I know tons of internet entrepreneur friends and colleagues who are just as successful as I am, if not moreso, who never devoted themselves to learning conversion optimization, sales copywriting, etc. with the same fervor I did.
Which path is best for you depends largely on where you’re at in your journey, what your natural inclinations are due to your personality type, and what your long-term goals in this industry are.
Regardless of which path you choose: always do your best to continue improving and learn from the mistakes you make along the way — there will be plenty. This ensures as much long-term success and professional security as possible for either type of website owner.Believe me: if you’re committed to being an internet entrepreneur for the long haul — that’s peace of mind you’ll be grateful for at several points throughout your career.
About Ian Pribyl
Ian Pribyl is the Owner & Lead Instructor at StoppingScams.com, author of the best-selling blogging & affiliate marketing book “From Nothing,” and Co-Founder of a blossoming startup in the optical/optometry industry.
He currently resides with his wife and three dogs in Austin, TX where he does everything he can to provide free & low-cost training for aspiring bloggers and affiliate marketers.