Determining Whether You Should Run Ads on Your Business Website
As an online business owner, you face many special challenges as you try to compete with larger business rivals. One challenge you share in common with these larger businesses is figuring out how to maximize the monetization of your website traffic. A large portion of the people who come to your website will have no interest in purchasing anything you have to sell. However, if you’re effectively generating target market traffic, your website visitors should all have some interests in common. What you need to decide is to what extent you’re willing to go to take monetary advantage of these mutual interests.
Changes in Web Business Thought
While advertising has always been a driving force of the Web, those with business websites, particularly sole proprietors, were once very resistant to the idea of allowing other businesses to advertise on their sites. The two main factors in this were that they were afraid of sending customers to their competitors and they held onto a belief that the longer you can keep an individual on a website, the more likely that individual will make a purchase. Both of these decision factors have proven to be valid. However, there are other aspects of the online marketplace that often prove to be more significant.
One realization of the nature of the online marketplace that has come to the forefront is the enormous size of seemingly obscure niche markets. Sending a few of an endless stream of customers to competitive websites may not hurt your customer retention strategies as much as it benefits your bottom line. The money gained from doing so can be invested to increase your own website visitor counts. So, you not only monetize the traffic you send to your competitors, but you can use it to increase the exposure of your own website.
Another aspect of the online marketplace that is being better understood is the value of providing customers with links to product or service accessories. Your own customers may appreciate being able to use your site to find other products of interest to them. So while you’re getting paid for advertising on your site, you’re also providing a service for your customers.
Similarly, an aspect that is now being closely focused on in the online marketplace is premium products with high profit margins. If your business focuses primarily around a commodity product or providing information or entertainment, you may be able to achieve commissions selling premium products related to your site content that far exceeds the profit margins of your own products. This is particularly true of high volume traffic websites centered around content.
This has led to a large increase in the final aspect of advertising growth for other businesses on business websites. The high profitability is involved in offering content that is in some way unique and valuable to either a large group of people or an underserved group of people. The vast majority of business websites being put on the Web today don’t actually sell any products of their own. They merely focus on providing content that is so compelling, it drives high volumes of targeted traffic to advertisers.
Decision Factors
Running contextual advertising on your website does send your customers away and cuts down on your own opportunities to close sales. You have to determine whether advertising income will be greater than lost sales income, but this shouldn’t be the only factor in your decision.
Another factor you should consider is how well the advertising fits in with the brand image you’re trying to build. Will the advertising you intend to run harm your image, enhance your image, or have a negligible impact on your image?
If you run a premium product or premium services website, you probably should only run advertising that you have pre-approved, if any at all. Your own profit margins outweigh anything you could make from random advertising revenue, and the advertising may destroy your professional image.
If you run a content website that does not charge any sort of membership dues, advertising should be a perfect fit for your website. The more closely you can link these ads to the interests of those who read your content, the more profitable it will be.
If you run a small, sole proprietorship with only a semi-unique product line, you need to be careful about sending your customers away, especially to the competition. Advertising may still be quite profitable for you, but you’ll want to ensure that you’re only advertising for businesses with complementary products. Advertisements for direct competitors may not only decrease your sales but your site traffic as well.
If you run an online business that doesn’t fit neatly into any of these categories, you’re not alone. You will need to determine which of the aspects of the online marketplace apply most to you to figure out what type of advertising you should run on your website. You may want to try various things out in limited amounts for a while so you can better estimate the trade-off between advertising monetization and potential customer deflection.
