How to understand how websites make money (Guide for beginners)

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There are about 200 million people who make up the Internet market with tens of thousands of people all over the world joining everyday. Thousands of new websites open each day. This very website is evidence that you can find content and almost any topic you can imagine.

Everyone has some idea that websites make money by selling ads. With so many people staring at their computer screens online for hours a day it is no surprise that the Internet has completely changed the advertising industry.

Here is a simple review of how websites make money.

Step 1 Sell ads.

In many ways a website is like a highway billboard sign. The owner of the billboard has a little space that is viewed by people passing by it on a road. The location of the billboard dictates the cost to advertise on it. The same holds true for a website, but the great part is that EVERYONE has an equal chance to own a billboard on the best highway in the world, the information super highway. The hard part is getting people to see your site. The more eyes on your page the greater your chance to make money through ads.

Most websites use advertising programs like Google’s Ad sense to sell the ad space. The owner of the website is not going door-to-door asking for advertisers. Well if your site is very concentrated in a local market you could do this, but it’s not a good use of your time.

Step 2 There are two ways websites are paid by ads.

One-Impressions, which is just a fancy term for views. To understand what an impression is take a look to the right side of this page. Do you see and ad? You might have to scroll up or down. Once you see it make note of what the ad is and then hit the page refresh button on your browser. Take a look at the ad again. Did it change? Well each change of an ad is an impression. The website owner can charge the advertiser for each impression.

Step 3 The other way ads make money is a click-through.

Go back to that ad you saw in step two and click on it. Go ahead I’ll wait.

Did it take you to another website? Well that was a click-through. Its better than an impression is that the advertiser knows the person seeing the ad actual visited the page and saw whatever it is they wanted you to see. Go ahead ad click on a few more ads on this page. Easy right? There are a ton of companies out there that can measure all the clicks on each ad and even the number of times your mouse hovers over an ad.

The more visits to your website increase the odds that visitors will see the ads and click on them.

Step 4 Affiliate programs

This is when your website points a visitor to another website where that visitor buys something. The seller of that something gives you a cut for sending the visitor of your site their way. The most common examples are book sales like Amazon and Barnes and Noble.
You can also join Affiliate Networks, Such as:

SaleAShare or
Bidvertiser or
ClickBank and Many Others.

Step 5 Donations.

Stick out your hat and ask for it. Its easy with online payments like Pay Pal. Many bloggers use this option. “Hey if you like what you read here today send me a dollar”.

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