There are three basic types of online ad, in terms of revenue:
CPM – Cost Per Thousand Impressions
You serve 10,000 impressions of an ad at a rate of $5 CPM, and you’ve made $50.
CPC – Cost Per Click
You serve 10,000 impressions of an ad at a rate of $5 CPC, and its clicked on five times, and you’ve made $25.
CPA – Cost Per Acquisition
You serve 10,000 impressions of an ad at a rate of $5 CPA, and its clicked on five times, and one person signs up for an account on the advertiser’s landing page. You’ve made $5.
Notice the progression. The CPM ad required just one step – ad delivery – before you made money. The CPC ad required two steps – ad delivery, plus customer click – before you made money. The CPA was worst of all – not only did you have to deliver the ad, and not only did the customer have to click on it, but they had to complete an action after all that before you’d see a single red-cent.
Now, this is where a lot of folks will say I’m crazy. There are oodles – OODLES I say – of web entrepreneurs out there who claim to make tens of thousands of dollars a month from affiliate marketing (essentially, CPA ads). They say that its all about testing each opportunity and then going full-speed with those that work best for your niche. They say that once you’ve found those 2 or 3 CPA campaigns that convert well for your sites, that the money just flows in.
That may be true for them, but its never – NEVER – been true for me. Not once in thirteen years of online advertising have I ever made significant money from a CPA ad campaign. Unless you’re in a very specific niche that just happens to be a haven for CPA campaigns (ring tones, for example), CPA’s are a pipe dream. I don’t bother with them. Ever.
CPC’s are a bit of a grey area for me. For years I avoided CPC ads – that is, until Google came around and completely turned the CPC business on its head through relevant, contextual advertising. The only CPC ads I run are Google Adsense, because they have an enormous reach and because their ads are always contextually relevant to my audience. Because of that, my visitors click the ads, and I make money. Not boatloads, by any means, but on certain sites and in certain niches, Google Adsense adds a significant percentage to my daily numbers.
Needless to say, any CPC campaigns that are not contextually targeted – ignore them. No one will click on them, and you’ll serve 5 million impressions and pull in about twelve bucks for your troubles. Not worth it.
CPM ads. These are my bread and butter. I love CPMs. On many of my sites I will run CPMs and ONLY CPMs. They’re constant, they’re steady, and you always know what you’re going to get. This is the workhorse of my little mini-economy. I’ll generally run anything that’s over $0.50 CPM on my sites, though I regularly have campaigns that pay upwards of $7.50 or more CPM. The overall numbers seem small compared to the mini-fortunes that some CPC/CPA networks will “promise” you, but unlike those pie-in-the-sky offers, CPMs pay out every time.
If you’re new to online advertising and not sure what type is right for you, I’d say, stick with CPMs for the most part, and do some small-scale experimentation with Google Adsense. All other CPC/CPA campaigns are essentially – in my point of view – a waste of time. Unless you’re in a really particular niche that is known for CPAs, its just not worth the effort.
Thursday, May 29, 2008
Monday, May 5, 2008
Self-Sustaining Web Sites – Passive Income with Minimal Maintenance
In a previous post I explained why I thought blogging was a time-sink and an awful way to make money online, and I said that my goal was to build 100% self-sustaining web sites that can run on their own without needed constant updates and maintenance. Well, that’s all good and well, but what exactly is a self-sustaining web site?
First, we have to look at what makes a visitor come back again and again to a site. Its one word. Value. If you offer something of value to a visitor – information, amusement or entertainment, a social atmosphere, or a useful tool – they will come back to your site time and time again.
In my time, I’ve built informational/content sites, game sites, blog sites, forum sites and e-commerce stores. I’ve had the least amount of success with e-commerce, and generally-speaking, I’m done with it – I don’t see myself ever fiddling with that again. Selling products online to me isn’t Passive Income – every sale is work you have to do. Work to get the product, wrap the product, ship the product, process payment, process returns, deal with defects and shipping problems, etc. Who needs the hassle? So for me, e-commerce sites are out.
Blog sites, like I mentioned earlier, aren’t that much better. Having to write 1-2 original posts a day is work, plain and simple, and its not Passive Income. (There is a work-around for this, however, but I’ll talk about this a little later).
Informational sites are great, but only if you have enough original and insightful content to completely corner the market on a specific niche. I’ve been able to do this only once with an informational site, and it wasn’t easy. In fact, the amount of hard work it took to get there more or less precludes me from every trying this again. So while I do currently make Passive Income from my informational site, if you consider the thousands of hours I spent over more than twelve years to compile all that information, it starts to look more and more like Active Income. And that’s a no-no.
Forum sites… now we’re getting somewhere. A forum is a community of people communicating with one another, whether you’re around or not. What could be more perfect? The site gains more and more original content each day, with every new post and every new member, and each visitor gets value out of the site not only from the content within but from the sense of community and partial-ownership that each forum member feels when participating in the conversation. To me, a successful forum is just like a snowball… keep the forum running fast and bug-free, make sure you’ve got a couple of hard-working and even-minded moderators manning it, and its essentially a set-it-and-forget-it cash machine.
But for me, the most successful sites I’ve even made have been game sites. Obviously, not everyone can do this – you need to be able to do at least medium to high-level programming in order to pull it off (or, you can hire someone to do it for you). But if you can put together a game site where players can register accounts and compete against other players for high scores, and if its well-designed and fun to play, you’re in the zone, mister. Competitive game sites are great for Passive Income because once you create the games, they’re essentially done – you don’t need to tweak them or update them, or really do anything. Folks will come and play, and those who register to compete will get their competitive juices flowing and return again and again to make sure their scores are on the Hall of Fame.
For me, forum/community sites and game sites have been the single biggest earners for me. Not only that, but they’re completely, 100% self-sustaining. All I need to do is keep an eye on the server and make sure things are running fast and smoothly for everyone. I’ll go for days, sometimes even weeks at a time without doing any significant work on a site – if you program them well, you’ll almost never have to.
And that’s the key. Because there are only so many hours in the day, you’ve got severe limitations on how much Active Income you can make in a lifetime. But if you’ve got multiple streams of Passive Income coming in every day, with minimal or no work on your part, there’s practically no limit on what you can pull in every month.
So before you start your next web site, ask yourself – is this going to be self-sustainable? And if not, how can you make it so?
First, we have to look at what makes a visitor come back again and again to a site. Its one word. Value. If you offer something of value to a visitor – information, amusement or entertainment, a social atmosphere, or a useful tool – they will come back to your site time and time again.
In my time, I’ve built informational/content sites, game sites, blog sites, forum sites and e-commerce stores. I’ve had the least amount of success with e-commerce, and generally-speaking, I’m done with it – I don’t see myself ever fiddling with that again. Selling products online to me isn’t Passive Income – every sale is work you have to do. Work to get the product, wrap the product, ship the product, process payment, process returns, deal with defects and shipping problems, etc. Who needs the hassle? So for me, e-commerce sites are out.
Blog sites, like I mentioned earlier, aren’t that much better. Having to write 1-2 original posts a day is work, plain and simple, and its not Passive Income. (There is a work-around for this, however, but I’ll talk about this a little later).
Informational sites are great, but only if you have enough original and insightful content to completely corner the market on a specific niche. I’ve been able to do this only once with an informational site, and it wasn’t easy. In fact, the amount of hard work it took to get there more or less precludes me from every trying this again. So while I do currently make Passive Income from my informational site, if you consider the thousands of hours I spent over more than twelve years to compile all that information, it starts to look more and more like Active Income. And that’s a no-no.
Forum sites… now we’re getting somewhere. A forum is a community of people communicating with one another, whether you’re around or not. What could be more perfect? The site gains more and more original content each day, with every new post and every new member, and each visitor gets value out of the site not only from the content within but from the sense of community and partial-ownership that each forum member feels when participating in the conversation. To me, a successful forum is just like a snowball… keep the forum running fast and bug-free, make sure you’ve got a couple of hard-working and even-minded moderators manning it, and its essentially a set-it-and-forget-it cash machine.
But for me, the most successful sites I’ve even made have been game sites. Obviously, not everyone can do this – you need to be able to do at least medium to high-level programming in order to pull it off (or, you can hire someone to do it for you). But if you can put together a game site where players can register accounts and compete against other players for high scores, and if its well-designed and fun to play, you’re in the zone, mister. Competitive game sites are great for Passive Income because once you create the games, they’re essentially done – you don’t need to tweak them or update them, or really do anything. Folks will come and play, and those who register to compete will get their competitive juices flowing and return again and again to make sure their scores are on the Hall of Fame.
For me, forum/community sites and game sites have been the single biggest earners for me. Not only that, but they’re completely, 100% self-sustaining. All I need to do is keep an eye on the server and make sure things are running fast and smoothly for everyone. I’ll go for days, sometimes even weeks at a time without doing any significant work on a site – if you program them well, you’ll almost never have to.
And that’s the key. Because there are only so many hours in the day, you’ve got severe limitations on how much Active Income you can make in a lifetime. But if you’ve got multiple streams of Passive Income coming in every day, with minimal or no work on your part, there’s practically no limit on what you can pull in every month.
So before you start your next web site, ask yourself – is this going to be self-sustainable? And if not, how can you make it so?
Saturday, April 19, 2008
Blogging is Awful for Making Money Online - Unless...
Ok, so I said previously that blogging was a time-sink, that it wasn’t self-sustainable and that you’d be hard-pressed to make a fortune in actual Passive Income from it. All of that is true.
With one exception.
You can create a successful blog site, and never have to post a thing. Remember, blogging is a huge phenomenon, and there are thousands of new bloggers coming online every day. Why not set up a blog site where you invite others to blog on a shared topic? Set up the blog for them, tailor it to the blogger’s preferences to make sure they’re happy, and then let them loose! You host it, you make the ad money, and your bloggers work diligently to add fresh new content every day.
Impossible, you say? Not at all. You just need to find a way to make it worth their while. Whether this means some sort of revenue-share (I frown on this, just because the accounting is often nightmarish) or some more creative means of compensation… maybe you set them up with a snazzy, professionally-designed blog, tailored precisely to their tastes. Or maybe you give them some kind of freebies – a nice email address on a cool domain for instance. Or you can do what I did on one of my sites – I sent each blogger free products to review, and they posted a new blog entry every few days, with a review of each product. These products don’t even need to be “physical” things – you can send them digital ebooks to review, or get them trial accounts into other web sites… be creative! As long as the blogger is getting something of value from the experience, they will be happy and productive, and you’ll keep getting free, daily content for your site.
Blogging on your own = bad idea.
Setting up a blog site and having a dozen other people blog for your site = brilliant.
With one exception.
You can create a successful blog site, and never have to post a thing. Remember, blogging is a huge phenomenon, and there are thousands of new bloggers coming online every day. Why not set up a blog site where you invite others to blog on a shared topic? Set up the blog for them, tailor it to the blogger’s preferences to make sure they’re happy, and then let them loose! You host it, you make the ad money, and your bloggers work diligently to add fresh new content every day.
Impossible, you say? Not at all. You just need to find a way to make it worth their while. Whether this means some sort of revenue-share (I frown on this, just because the accounting is often nightmarish) or some more creative means of compensation… maybe you set them up with a snazzy, professionally-designed blog, tailored precisely to their tastes. Or maybe you give them some kind of freebies – a nice email address on a cool domain for instance. Or you can do what I did on one of my sites – I sent each blogger free products to review, and they posted a new blog entry every few days, with a review of each product. These products don’t even need to be “physical” things – you can send them digital ebooks to review, or get them trial accounts into other web sites… be creative! As long as the blogger is getting something of value from the experience, they will be happy and productive, and you’ll keep getting free, daily content for your site.
Blogging on your own = bad idea.
Setting up a blog site and having a dozen other people blog for your site = brilliant.
Wednesday, April 2, 2008
Why Blogging is an Awful Way to Make Money Online
Following on my “Why You Will Never Be John Chow” post, I thought I’d touch a little on why I believe blogging is an absolutely horrible way to make money online. First though, let’s talk a little about the difference between Active Income and Passive Income. (These are my own personal definitions, by the way – others use these terms in different contexts, so don’t get them confused).
To me, Active Income is money that you make as a direct result of X-amount of work. Some examples would be:
- salary from a 9-5 job
- hourly wages from contract work on the side
- $20 you get for mowing your neighbor’s lawn
- selling a $50 product and earning $15 in profit
Passive Income, on the other hand, is money that you make without having to lift a finger… money that comes in 24x7, day or night, weekends and holidays included. These include:
- interest earned on a savings account or money market fund
- money from online advertising on your web sites
- recurring revenue from online subscriptions
-
My goal, with all of my web sites, is to make all, or nearly all, my money from Passive Income. And, so far, that’s generally what I do. About 95% of my monthly revenue comes from online advertising spread across my various web sites. I get paid every time an ad is viewed or clicked, and I serve hundreds of thousands of ad views every single day. Whether I’m at my desk working or if I’m sleeping or eating or on holiday, or doing whatever, I’m earning money, 24x7. I don’t have to lift a finger to earn that money.
Ok, ok… so you want to make the vast majority of your money with Passive Income. Fine. So why is blogging so awful?
Well, in my view, maintaining a money-making blog just isn’t Passive Income. All of my web sites are 100% self-sustaining. Traffic comes in whether I update them once a day or once a month. I specifically chose to build web sites with this in mind.
A blog, on the other hand, is a huge… a HUGE… time-sink. If you don’t update your blog every day, or at least every other day, it will be considered stale and visitors generally won’t return to your site again and again. So its an enormous time commitment to have to write at least 1-2 posts a day. And unless you’re a fairly skilled writer, its damned hard to write that much and still keep things fresh without just rehashing the same ideas again and again.
So for me, blogging isn’t Passive Income – even if you do get your money from online advertising. Its not quite Active Income either – since the work you do isn’t tied directly to the money you make - but its something in between. (Yes, I realize the irony of me blogging about making money online, and bad-mouthing the practice all at the same time… but then again, I don’t make my money from blogging.)
Personally, I would much rather build a self-sustaining web site and update it once every few weeks – if even that – and just let the ad money roll in. What kind of web sites are self-sustainable? I’ll cover that in another post. :-)
To me, Active Income is money that you make as a direct result of X-amount of work. Some examples would be:
- salary from a 9-5 job
- hourly wages from contract work on the side
- $20 you get for mowing your neighbor’s lawn
- selling a $50 product and earning $15 in profit
Passive Income, on the other hand, is money that you make without having to lift a finger… money that comes in 24x7, day or night, weekends and holidays included. These include:
- interest earned on a savings account or money market fund
- money from online advertising on your web sites
- recurring revenue from online subscriptions
-
My goal, with all of my web sites, is to make all, or nearly all, my money from Passive Income. And, so far, that’s generally what I do. About 95% of my monthly revenue comes from online advertising spread across my various web sites. I get paid every time an ad is viewed or clicked, and I serve hundreds of thousands of ad views every single day. Whether I’m at my desk working or if I’m sleeping or eating or on holiday, or doing whatever, I’m earning money, 24x7. I don’t have to lift a finger to earn that money.
Ok, ok… so you want to make the vast majority of your money with Passive Income. Fine. So why is blogging so awful?
Well, in my view, maintaining a money-making blog just isn’t Passive Income. All of my web sites are 100% self-sustaining. Traffic comes in whether I update them once a day or once a month. I specifically chose to build web sites with this in mind.
A blog, on the other hand, is a huge… a HUGE… time-sink. If you don’t update your blog every day, or at least every other day, it will be considered stale and visitors generally won’t return to your site again and again. So its an enormous time commitment to have to write at least 1-2 posts a day. And unless you’re a fairly skilled writer, its damned hard to write that much and still keep things fresh without just rehashing the same ideas again and again.
So for me, blogging isn’t Passive Income – even if you do get your money from online advertising. Its not quite Active Income either – since the work you do isn’t tied directly to the money you make - but its something in between. (Yes, I realize the irony of me blogging about making money online, and bad-mouthing the practice all at the same time… but then again, I don’t make my money from blogging.)
Personally, I would much rather build a self-sustaining web site and update it once every few weeks – if even that – and just let the ad money roll in. What kind of web sites are self-sustainable? I’ll cover that in another post. :-)
Saturday, March 15, 2008
Why You Will Never Be John Chow
There’s no way I can run a “Make Money Online” blog without referencing the big-daddy of this little subculture of get-rich-quick – John Chow. For those who don’t know him, he’s a 40-something web-entrepreneur based out of Vancouver, Canada, and he shares his “tips and tricks” on his blog at www.johnchow.com. Truth be told, I check his blog at least once a day, though its actually rare that he shares anything truly insightful about making money online. Most of his posts are either about restaurants he’s eaten at, or boastful videos or pictures of himself at various blogger conferences, or reviews of uninteresting sites that have paid him $500 to be featured on his blog… in fact, lately, at least half, if not more, of the posts on his site aren’t even written by him, but rather by “guest bloggers” who submit content for him to post.
But all that said, you can’t argue with results. As of April 2008 John Chow claims to be making roughly $30,000 a month just from his blog alone. By any measurement, that’s impressive. (And that number seems to grow with every passing month…)
This guy obviously knows his stuff when it comes to monetizing a web site. The problem is, he’s championing a business model that very few, if any, other bloggers will actually ever be able to pull off. John Chow is a phenomenon – he’s practically an Internet meme. In my view, he’s like that UK kid who put up the Million Dollar Homepage. Was it a brilliant idea? No. It’s a dumb idea that, by sheer dumb luck and a little hard work, just happened to succeed. There are now thousands and thousands of Million Dollar Homepage knockoffs polluting the Internet, and I’ve yet to hear of a single one pulling in significant money. It was a one-off.
Just like John Chow is a one-off. There are thousands of wanna-be copies, but none have (and none will) achieve the same level of success that he has.
John Chow doesn’t make insane money off his blog because he’s a marketing genius. He makes insane money off his blog because he’s convinced others that’s he’s a marketing genius. If you read his posts – and if you haven’t already swallowed the kool-aid – you’ll see that he offers very little by way of original insight. But that doesn’t matter. He’s got a captive audience full of middle-class schmos who think they’re going to strike it rich just by following his advice, and that’s a goldmine for predatory advertisers. Just look at the folks who advertise on his blog – “Make $93,128 a week on Adsense!” or “Beach Bum makes $231,982 with his laptop!” Its all just empty promises, foisted on a readership that is eager to earn money but too caught up in the frenzy to realize that its all a house of cards.
I don’t hold anything against John Chow – he’s making oodles of money, and as far as I can tell he pumps a fair percentage of it into charity concerns – but I do get worried when I see so many folks eagerly swallowing whatever they’re told by so-called make-money-online gurus. I have a much bigger problem with the advertisers he allows on his site who promise insanely huge returns for little or no initial investment. Like I tell everyone… if someone were really making $100k a month from their get-rich-quick “system,” why on earth would they want to share their secret with any schmuck off the street for a measly $14.99?
Think about it.
But all that said, you can’t argue with results. As of April 2008 John Chow claims to be making roughly $30,000 a month just from his blog alone. By any measurement, that’s impressive. (And that number seems to grow with every passing month…)
This guy obviously knows his stuff when it comes to monetizing a web site. The problem is, he’s championing a business model that very few, if any, other bloggers will actually ever be able to pull off. John Chow is a phenomenon – he’s practically an Internet meme. In my view, he’s like that UK kid who put up the Million Dollar Homepage. Was it a brilliant idea? No. It’s a dumb idea that, by sheer dumb luck and a little hard work, just happened to succeed. There are now thousands and thousands of Million Dollar Homepage knockoffs polluting the Internet, and I’ve yet to hear of a single one pulling in significant money. It was a one-off.
Just like John Chow is a one-off. There are thousands of wanna-be copies, but none have (and none will) achieve the same level of success that he has.
John Chow doesn’t make insane money off his blog because he’s a marketing genius. He makes insane money off his blog because he’s convinced others that’s he’s a marketing genius. If you read his posts – and if you haven’t already swallowed the kool-aid – you’ll see that he offers very little by way of original insight. But that doesn’t matter. He’s got a captive audience full of middle-class schmos who think they’re going to strike it rich just by following his advice, and that’s a goldmine for predatory advertisers. Just look at the folks who advertise on his blog – “Make $93,128 a week on Adsense!” or “Beach Bum makes $231,982 with his laptop!” Its all just empty promises, foisted on a readership that is eager to earn money but too caught up in the frenzy to realize that its all a house of cards.
I don’t hold anything against John Chow – he’s making oodles of money, and as far as I can tell he pumps a fair percentage of it into charity concerns – but I do get worried when I see so many folks eagerly swallowing whatever they’re told by so-called make-money-online gurus. I have a much bigger problem with the advertisers he allows on his site who promise insanely huge returns for little or no initial investment. Like I tell everyone… if someone were really making $100k a month from their get-rich-quick “system,” why on earth would they want to share their secret with any schmuck off the street for a measly $14.99?
Think about it.
Saturday, February 23, 2008
About Me
I’ve worked in the internet/tech-business since 1996, but always for someone else. Working in online startups has been fun, and I can’t say I didn’t learn a lot, but there’s nothing as rewarding and as exciting as working for yourself, on projects of your choosing.
I’ve owned and operated more than two dozen different web sites over the years. Most died within 6 months. A rare few, however, have been moderately successful. This blog is where I share my trials and triumphs in the management and monetization of those successful web sites. I will share my best, time-proved methods for generating online revenue, and hopefully learn a couple of new tricks along the way.
Unlike many other “make money online” blogs, I’m not going to fill your pretty little heads with inflated numbers and insanely-high expectations. The reality is, no one makes $95,718 a month as a “beach bum.” No one pulls in 7-figure salaries just by dropping a few adsense codes into a moderately-trafficked web site. Anyone who promises you this is a scam-artist, plain and simple. (Ask yourself, “If they’re really making $100k a month… why are they trying to sell me an eBook for fifteen bucks?”)
My reality, as of early 2008, is this:
- I’m thirty years old
- I’m married, with no kids
- I have a full-time, salaried job in the Internet industry
- I manage 4 medium-sized web sites, and a handful of smaller ones, in my spare time
- I make roughly $4,000-$5,000 per month from online advertising on these sites
My goal is to increase that monthly revenue by a factor of 3, so that I’m consistently pulling in $12,000 - $15,000 a month via mostly Passive Income. Can I do it? You’ll just have to keep reading. ;-)
I’ve owned and operated more than two dozen different web sites over the years. Most died within 6 months. A rare few, however, have been moderately successful. This blog is where I share my trials and triumphs in the management and monetization of those successful web sites. I will share my best, time-proved methods for generating online revenue, and hopefully learn a couple of new tricks along the way.
Unlike many other “make money online” blogs, I’m not going to fill your pretty little heads with inflated numbers and insanely-high expectations. The reality is, no one makes $95,718 a month as a “beach bum.” No one pulls in 7-figure salaries just by dropping a few adsense codes into a moderately-trafficked web site. Anyone who promises you this is a scam-artist, plain and simple. (Ask yourself, “If they’re really making $100k a month… why are they trying to sell me an eBook for fifteen bucks?”)
My reality, as of early 2008, is this:
- I’m thirty years old
- I’m married, with no kids
- I have a full-time, salaried job in the Internet industry
- I manage 4 medium-sized web sites, and a handful of smaller ones, in my spare time
- I make roughly $4,000-$5,000 per month from online advertising on these sites
My goal is to increase that monthly revenue by a factor of 3, so that I’m consistently pulling in $12,000 - $15,000 a month via mostly Passive Income. Can I do it? You’ll just have to keep reading. ;-)
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