Category: 
September 1, 2010I’m curious to know how ad revenue for websites works. How does the revenue work? I understand that companies pay for space on a website. But I’ve also heard that some of them only pay when visitors actually click on the ads. So how does it work? Does the number of site visits dictate the rate that companies pay when someone clicks on the ads? Or do companies pay the website owners both for placement of the ads AND for visitors who actually click on the ads?
I’m curious to know how ad revenue for websites works. How does the revenue work? I understand that companies pay for space on a website. But I’ve also heard that some of them only pay when visitors actually click on the ads. So how does it work? Does the number of site visits dictate the rate that companies pay when someone clicks on the ads? Or do companies pay the website owners both for placement of the ads AND for visitors who actually click on the ads?
1 person has left a comment
As you say, some people pay for space (or more specifically a link) on a website - this can be monthly, annually or even a one-off payment.
The other type is Pay Per Click (PPC) where the advertiser pays so much every time someone clicks on the link (the more savy one will pay per unique visitor to stop people clicking many times). What decides the rate tends to be mainly the type of service or product that you are advertising, financial products for example pays more than florists, although the website that you are advertising on can influence the rate - the more important the website the more you might have to pay.
Actually, there is a third type but this is affiliate links, in this method the advertiser does not pay for the click (normally) but pays the website with the link a commission on every sale made to people that have clicked the link - this commission can either be a fixed amount (for example Argos in the UK pays 25p for every sale where the buyer collects from store) or a percentage of the sale price.
Hope this helps answer your questions.