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Archive for February, 2008

3 Avenues to Profit Online: #1 Traffic

Monday, February 25th, 2008

Traffic is typically the business model for hobbyists and “web ventures” though some companies try to leverage it as revenue.  Sites that predominately rely on traffic for revenue rarely promote their own product or service.  Typically the site is designed to fill a niche.  The really successful ones make up the rags to riches stories that every web venturist dreams of. 

So  where does the money come from.  One of two ways:

  1. Selling advertising space.
  2. Referral linking for commission.

Selling advertising is the most common by far.  With Google Adsense making advertising easier than ever, any person can attempt revenue generation from ad space with little effort.  A site owner doesn’t have to sell the deals, Google will do it for them.  Sounds great right!  Here’s the catch (there always is one), most people make next to nothing, or nothing, on their advertising.  Google will place the ad but if no one clicks on it you get a whopping goose egg for payment.  Hence traffic makes revenue.  The more people to the site, the more chance an ad gets clicked, the more revenue generated. Google will do it’s best to put relevant adds on your site but that puts the responsibility on you to have a target audience.

Referral commissions are similar, and also have broker companies.  (Fair warning, many of these sites are scams and want sign up fees.  Once you sign up and pay your money you get exactly nothing in return).  However, there are some legitimate services that sell product through referral links.  Some type of ad or link is placed on your site, visitors click it and go to the sponsor, if they buy something and it’s tracked to your site, you’re paid a commission.  You essentially take on the role of lead generator for someone else and it’s up to you to compel visitors to get there from your site.

Both methods have two critical problems.  The first is that visitors tend to be less and less likely to visit ad links, though Google is beginning to buck this trend.  In the case of referral commissions, they are even less likely to click and buy.  These resistances make generating significant revenue challenging.  The second problem is generating enough traffic to make it a viable revenue stream.  Let’s be honest, many of the successful traffic and social sites are lucky.  There was no in depth analysis done to accurately gauge a market deficiency.  Someone did a project or started a site because it was fun, it happened to hit a niche, the site owner was smart enough to develop that, and the business took off (read the link above for a case in point).  Predicting social media hits is extremely challenging, I can’t do it, any honest internet marketer will admit that they can’t as well.  The odds are similar to predicting the lottery, that few social or traffic driven sites succeed.  This is not a knock on social media marketing, which can be a valuable piece of a marketing matrix, it’s a knock on building a business that is social media or generating revenue solely based on traffic.

The point is that traffic can be turned into money.  New and better tools are available to do it.  However, building a sustainable business from it is hard.  If it wasn’t everyone would have advertising revenue flooding in from their site.  If this is your goal, two pieces of advice are prudent.  First, be passionate about what you’re creating because financial success could be a long time in coming.  If you enjoy the project and learn, that can be the fulfilling part.  Second, put the work in.  These sites succeed from good content for a solid niche market.  If you are knowledgeable enough in a specific area, people will be interested in your content.

One final thought, if you’re toying with using this a secondary or tertiary revenue stream, think through it.  Advertising can undermine credibility for the wrong market and end up costing a lot more than it brings in.

3 Avenues to Actually Making Money on the Internet!

Friday, February 22nd, 2008

This is the most common thing I hear from people with a “web idea”:  I build this or that, and make money on the internet (subtext: I should be a millionaire within the year).  While there is money to be made on the internet many people have been brainwashed by dishonest ads and get rich quick schemes.  The internet is like anything else, money can be made with a good idea and work.  It’s not going to fall into your lap just because you make a website or application.

So in an effort to debunk some get rich quick notions I’ve broken down legitimate opportunities into 3 categories and explain how people actually make money through the internet.

  1. Traffic
  2. Products
  3. Services

I’ll break each one down into categories in the coming posts and show how each one has potential but also takes time and effort, sorry, I don’t have an incredibly easy way that anyone can make $20,000 a month.

Internet and Email Marketing is a No-Brainer for Trainers and Consultants.

Tuesday, February 12th, 2008

If you are a trainer or consultant and are not using the internet in your marketing matrix, you are missing a golden opportunity.  The media might as well be designed with this group in mind.  Why?  Internet and email marketing is built around communicating information.  It’s a trainer’s and consultant’s stock in trade.  Their business is built on having and communicating information.  It is perfectly suited to making people aware of the subject and industry niches served.

So what’s the downside?  Trainers and consultants need to be diligent about how much content is enough and how much is too little.  Everyone hates the online gimmick of “get valuable information” only to receive a nicely packaged sales pitch with little or no worthwhile content.  The reverse is just as dangerous, you can’t and shouldn’t teach people via these mediums.  It’s not well suited for it and that’s the part that potential clients have to pay for.

Finding that happy medium can be a challenge.  You want to provide some valuable insights but not get so in depth that people get confused.  Finding a proof reader that doesn’t know your business particularly well can provide guidance on whether too much or too little has been said.  They will be a good sample audience to say whether they found the information insightful or if it wasn’t over their head.

Trainers and consultants have a perfect opportunity to give a brief showcase of what they do and how good they are at it.  Not only will internet and email marketing be perfectly suited to displaying this content, it is the most cost effective way of delivering it.  If you’re not doing any online marketing, get started.  It will introduce people to your company and services, position you as a thought leader, and transition into leads.

When Do Content Management Systems (CMS) Help? When Do They Hurt?

Wednesday, February 6th, 2008

It’s becoming more and more common for web design and programming professionals to advertise a CMS with site creation.  These usually state a wonderful site that you can update yourself.  Sounds good on the surface but there are some key questions to ask before jumping on board.

The first is how the site is set up.  Many companies have stock templates that they put in place.  These are built on top of packaged CMS systems.  Sometimes that’s not a problem and is usually cheaper (though watch out for companies that try to hide their template use). Many times it is a problem.  Imagine if a client or prospect sees half a dozen sites just like yours but with the words changed.  It leaves a bad impression, the company looks canned.  So the first question: Is the site a template or original layout?

Another issue is how the site is put together.  Many times the web professional builds the site on a technology they don’t really understand.  This becomes a problem because there are often glitches in the layout.  As things change the website will start breaking down.  Unfortunately, many times the site creator is unwilling or unable to repair the damage.  Second question: Will ongoing support be provided?

The next problems have nothing to do with who puts the site together.  They are internal decisions.  Is someone available to make updates to the site?  Paying extra for the ability to change a site is a waste of money if no one has time to do it.  The person responsible needs to work with the web creator to fully understand the CMS, what it can do, what it can’t do, and effective ways of using it.  If there isn’t someone available with at least moderate computer skills, the CMS will be left unused.  This happens to at least half the sites I’ve seen using CMS.  So who will be responsible for the updates?

The final question is whether the person updating the content is comfortable and qualified.  Some basic copy-writing and proofreading skills are essential.  If the person updating the site can’t put a well structured sentence and paragraph together, the site will be confusing and unprofessional.  So does your site updater have some content skills?

If you have someone internally that will update the CMS and a good site creator, this is a great solution.  It’s typically more of an up-front cost but it saves money over time.  If you lack either a good creator or good updater it will be a wasted up front cost and only a matter of time before more money and time is spent repairing problems.  So as a review here are two questions to ask yourself and two for the site creator:

  • Do I or someone internally have time and computer skills to dedicate to keeping the site updated?
  • Does this person have basic copy-writing skills that they can be trusted to keep the site updated with current and relevant information?
  • Is the site creator making an original layout (not a template)?
  • Is the site creator available for troubleshooting if their original creation has technical flaws after using the CMS for a while?

If the answer is yes to all four, a CMS is probably perfect.  If even one is lacking there is a potential for disaster.  Weigh your options before assuming a CMS will “let you update your own content.”  In a good scenario that can be a great blessing, in a flawed scenario it will be a terrible curse of wasted time and money.