Little has changed since the first part of this article was written 10 months ago. Web advertising still generates $0.0014 per visitor, and a site only starts covering its operating costs from 2 million monthly visitors. In this second part, we'll focus on sponsorship sales, which in some ways resembles advertising. We'll then explore the sale of consumer products on behalf of third parties, such as price comparison tools, turnkey shops, and contextual product links. Finally, we'll look at direct sales of owned products, which involves setting up customer service and a logistics chain. We'll also question the relevance of keyword purchasing and provide a guide to boost sales while offloading sales costs onto an affiliate network.
Sponsorship
The concept of "sponsorship" is similar to advertising. The webmaster displays an ad on their site showcasing the product of their sponsor with a picture and a sales pitch, along with a link to the seller's site. The hope is that one of the visitors will click on the ad to purchase the displayed products. Once on the sponsor's site, the user discovers the full offer and can create a shopping cart or fill out a registration form. He is asked to provide his credit card number and email address. This triggers the referral's compensation. Typically, the sale must be immediate. As soon as the prospect's browser window is closed, goodbye commission! Few sponsors bother to record the prospect's origin in a cookie, which they could easily read upon the prospect's return. And of those who claim to do so, only a tiny minority actually practice it. Let's be serious; hardly anyone buys on a whim during their first visit.
As with advertising, the click-through rate for these types of ads is between 1 and 2%. Of these few clickers, less than 10% maintain their interest in the product beyond the second page visited on the sponsor's site. As a result, it typically takes between 1,000 and 2,000 visitors to make a sponsorship sale, provided the product is closely related to the content of the referral site. Compensation typically consists of a flat fee ranging from $0.2 to $15 or a percentage of the turnover, which ultimately comes to about the same. For products with a low conversion rate, the premium tends to increase and vice versa. But to achieve a yield close to 0.1%, you need to know the products that work, test and adjust for several months, and keep only the best. Finally, the webmaster presents the ads in the most advantageous way possible at the top of their web pages.
This poor performance is not excusable, but it is explainable. From the sponsor's perspective, sponsorship is not necessarily about selling, let alone allowing the webmaster to make a living. Often, the sponsor makes no effort to convert the click into cash because it's not in their best interest. The "landing page", i.e., the page of the sponsor's site where the user lands, almost never matches the product page of the ad. Thus, it's up to the user to search for it on the sponsor's site and, in doing so, discover a broader range of their offer. The referrer believes they are selling a product, while the sponsor is only aiming for brand awareness, creating a spontaneous reflex in the user to revisit their site. In this case, it's disguised advertising, if not outright stolen.
From an economic analysis standpoint, two hypotheses might explain this dismal profitability. The first would be that the prices paid to webmasters reflect the weak impact of web ads on the public. However, the measured impact of a web ad yields results equivalent to television and subway posters, better than bus stops, radio, and print media. On this basis, an advertiser must, when advertising outside the web, shell out $160 to reach 40,000 people with the same effectiveness, in contrast to the $30 mentioned above. The second hypothesis would be that prices are artificially kept low. As we've already seen with advertising, the webmaster's $130 shortfall precisely matches the intermediary advertiser's cut, which fluctuates between 60 and 90% of the total advertising revenue. Increased competition between advertisers would therefore be the key to the problem. In a well-oiled market where competition plays out fully and no player imposes its law, website creators and content managers would share a windfall of 70% of the revenue. But for now, sites are botched due to a lack of profitability.
Direct Sales
Content in progress...
Keyword Purchasing
Content in progress...
Creating an Affiliate Network
Content in progress...
Turning Dreams into Profit
Hardly a week goes by without someone telling me one or two new stories of fortunes built thanks to the web.
- "There's a guy with a forum that's booming with 10,000 visitors a day. He makes between $1,000 and $2,000 a month with Google Adsense."
- "I know a guy who sells a software package for $30. He sells 10 copies a day, so he makes $300 a day, or $9,000 a month."These stories are not false, but they are not representative of the average webmaster's reality. They are the exception, not the rule. The vast majority of websites are not profitable. The web is a vast ocean where a few big fish make a fortune, while the majority of small fish struggle to survive. It's a world where the rich get richer, and the poor get poorer. The web is not a gold mine, but a jungle where only the fittest survive.
It's essential to understand that the web is not a magical place where everything is easy and where money flows freely. It's a tough world where competition is fierce, and where you have to work hard to succeed. The web is not a place for dreamers, but for entrepreneurs who are willing to invest time, money, and effort to build a successful business.
So, if you're thinking of starting a website to make money, be prepared to work hard, invest in your project, and be patient. Success on the web is not guaranteed, but with determination, passion, and a good strategy, it's possible to build a profitable online business.