Section 4.1. Kinds of Ad Programs

4.1. Kinds of Ad Programs

Affiliate programs differ from most other advertising approaches: to make money your traffic has to generate sales. This important distinction has implications for your web site content and design.

It's worth going over the three primary approaches to making money via advertising with your web content so the underlying distinctiveness of affiliate advertising is clear.

The three most common ways to use advertising to make money with content on the Web are:

Affiliate programs

Affiliate programs pay you a sales commission when someone who clicks through a link on your site to an advertiser's site actually buys something from that advertiser.

Sponsored advertising

You are paid a fee when a sponsored ad (either banner or text) is displayed on your site. Sponsored ads are often called CPMshort for cost per thousand page impressionsads because these ads are paid for on a CPM basis.

For more information on CPM ads, see Chapter 5.

Contextual advertising

Contextual advertising is primarily text-based advertising that appears on web pages where there is a contextual relevance as determined by automated software. Contextual ads are often called CPCshort for Cost Per Clickads, because that is the basis on which they are paid.

For more information about contextual advertising generally, see Chapter 5. Google's AdSense is the best-known CPC program. Working with AdSense is explained in Part II.

From your viewpointthat of the publisher of content on one or more web siteswhat you probably really care about is how much money you can make from each kind of approach to advertising. Of course, that depends on a great many variables, and there are ways to maximize the yield from each kind of advertising program. It's worth experimenting to find out which kind of advertising works best with the specific content on your site (and the kind of traffic your site draws). It's also the case that some sites carry all three kinds of advertising.

The key conceptual difference among the three kinds of advertising is what a visitor to your site has to do to make you money. It's a spectrum.

One way to look at this is by the amount of action required on the part of your site visitor, from most to least:

• Affiliate adthe visitor has to actually get out a credit card and make an online purchase from the advertiser's site.

• Contextual adthe visitor has to actually click the ad to surf to the advertiser's page (but does not have to buy anything).

• Sponsored adall that has to happen is that it is displayed on your page.