Practical Guidelines for Monetizing your Website using Referrals

By Rob Gravelle

Practical Guidelines for Monetizing your Website using Referrals

When I was younger, I used to dream about touring the world and playing music in front of thousands of people. Over time, this dream morphed into a somewhat more grounded one where I spend my days recording and supplementing my income by writing articles on my laptop at the local coffee shop. I could be doing this right now, if not for my questionable spending habits! Since I'm still working working full-time, I love the idea of having my website make money for me around the clock, much like I enjoy having my investments work for me (even though that's not happening!).

Over the years, I've learned that there's more to making money online than building a website and throwing a few ads on it. As with any endeavor, making money is never a simple matter, but if you're willing to put it some dedicated effort, you might be able to eventually free yourself from the drudgery of 9 - 5 life. One way to do that is with referral links.

The Problem with Banner Ads

I really didn't think things through very carefully when I first launched my own website, www.robgravelle.com. I just threw a few banner ads at the top of the page and considered my work done. Several years later, care to take a guess at how much revenue my ads have brought in? If you answered zero, you would be correct.

There are a few good reasons why my banners have failed to improve my net worth by one cent. Let us count the ways...

  1. My site has many issues to begin with. It's just a repository for announcements, videos that I like, jokes, clothing editorials, and whatever else strikes my fancy that day. Does any of this appeal to anyone but myself. Not likely. While I enjoy a surprisingly high number of visitors, that is due to links in my articles like this one. I suspect that people who follow the links are just curious about who is doling out advice to them. It turns out that it's a wannabe rockstar who somehow got into IT. Once their curiosity about me is satisfied, they leave. That doesn't really give anyone much opportunity to click on banner ads.
  2. The ads don't relate directly to any of the site content. Sure, there are ads for music gear and CDs, but that is still too loose a connection to encourage click-throughs.
  3. My visitor numbers are still not good enough to employ such untargeted advertising. Yes, I did say that I get a fair amount of visitors for a personal website, but when you consider that the average click-through rate (CTR) for all industries is around 0.1%, that equates to about one ad click per month on my site. Out of those, only a small percentage of referrals might actually purchase something. I say might because no one has yet!

The lesson to take from all this is that, for really generic advertising like banner ads, you had better have a huge number of visitors. Ironically, once you've got that kind of traffic, there are much better ways to monetize it than through banner advertising. It's like the club owner who told me that my band would have to have a CD before playing his venue. I told him that if we had a CD, we wouldn't be playing at his whole-in-the-wall joint. Needless to say, once we did get a CD out, we never played that club again.

Advertising the Right Way: Referrals!

While a banner ad is a type of referral, the kind that I'm talking about is not a big flashing monstrosity at the top of your page. That sort of ad only cheapens your whole site and distracts visitors from your content. Instead, take a bottom-up approach, where the base is the site itself. Aim to create a site that is rich in relevant content and be sure to update it regularly, so people who enjoy your site will come back again and again. Successful sites bring value to their visitors, by providing useful information, engaging entertainment, or useful tools.

So what is a successful site? There is no across-the-board indicator that will tell you when it's time to think about advertising, and it's certainly not hits. The number of visitors only provides the most basic of metrics. Measuring a site's success is a bit outside the scope of this article, but I will say that the nature of your content will play a huge role on conversion rates. In general, the more "niche" the content, the fewer visitors are required to generate income through referrals. Let's say that I have a site all about my favorite band, Rush, and I have a link to exclusive 2112-era bobbleheads (complete with double necks!). You had better believe that my click-through rates will be far above the average. For that reason, some people have created whole sites dedicated to niche - and even micro-niche - markets. Examples include iPadBoardGames.org, thefrugalgirl.com, and my old website in college, winningblackjack. There are even sites about niche sites!

Once you've built up a loyal readership, you're ready to add some well-placed referral links. I am of the opinion that links to other sites should be placed towards the bottom of the page. The main reason is that clicking on the link takes the reader away from your site. As long as you've followed the above advice on creating quality content, most visitors will get to the bottom of the page.

So, if my site is about designer fashion reviews, it stands to reason that some links to stores where one can purchase reviewed items would be a useful addition to the content. Employed in this context, ads are not something that is forced on people like a cheap ploy. Rather, they add value in-and-of-themselves and compliment your content. Once you honestly say that your referral links bring value to your audience, then you're going about it the right way. All-too-often, we forget that advertising and making money are not bad things, they've just been tarnished by all of the awful tactics of greedy sociopaths and fraudsters.

I myself routinely donate money to makers of quality open source software and purchase products and services via referral links because I am a strong believer in paying people back for their efforts. Just as we tip the waitstaff for exemplary service, we should all reward those who deliver top-notch web content to us week after week.

Conclusion

For the love of all things wholesome, please do not load popup windows from your site or show a message box saying "Do you really want to leave?" when the user tries to navigate away from your site or close the browser tab. Those kinds of tactics are so 1990s and are the epitome of sleazy and desperate. Remember that the goal is to create quality content that will appeal to your audience and have them coming back time and time again. Do that and you'll have many ways to monetize your site, whether through referrals, or by other means.

Speaking of referrals, see if you can spot mine below...



Rob Gravelle

Rob Gravelle resides in Ottawa, Canada, and is the founder of GravelleWebDesign.com. Rob has built web applications for numerous businesses and has recently developed his own jquery-tables library.

Rob's alter-ego, "Blackjacques", is an accomplished guitar player, that has released several CDs. His band, Ivory Knight, was rated as one of Canada's top hard rock and metal groups by Brave Words magazine (issue #92) and reached the #1 spot in the National Heavy Metal charts on ReverbNation.com.

Rob uses and recommends MochaHost, which provides Web Hosting for as low as $1.95 per month, unlimited emails, and unlimited disk space!



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