There’s an interesting question asked on Yahoo Answers on whether there exists a tool or chart to tell how much a site will earn from advertising given its traffic levels.
There’s none that I know of — and with good reason. While traffic is one of the factors that can help a website earn from advertising, it is NOT the only factor. In some cases, traffic is not even the most important determinant of advertising income
Take for example the contextual advertising program Google Adsense. One website with 10,000 visitors a day can earn $50 a month while another with the same level of traffic may earn $5,000. There is no way to predict how much a site can earn from advertising
Another example is the exclusive social networking site that caters to the uber-rich
aSmallWorld.net. Per the NY Times , the site has only 150,000 members yet advertising clients typically spend anywhere from $20,000 to $50,000 per month. I know of many websites whose traffic exceeds 150K but can’t even earn $1,000 a month!
Here are the factors determining income from advertising:
- Type of advertising program — Banner ads earning via cost per impression will definitely benefit from huge traffic, while contextual advertising depends on factors other than traffic
- Type of visitors the site attracts — a site that attracts venture capitalists and CEOs can charge more for advertising than a site on online games that gets 1000x more traffic. Even with a much smaller audience, the first site can earn more from advertising than the second site that gets more traffic
- Suitability of the types of ads to the website — some sites simply lend better to a particular types of advertising. A forum that attracts high traffic may benefit better from a CPM-type of advertising campaign, while it can see very poor returns from CPC type of advertising. Same with news or gaming sites where the visitors are typically not interested in the ads — hence don’t click on them.
- Responsiveness of users to ads — Advertisers want ROI, and they will advertise again and again to sites that give them the best return on their investment. And that means spending money where they get the best returns, typically where the audience is more responsive to ads.
- Implementation of the ads — sites running cost per click (CPC) and cost per action (CPA) ads will earn more if they optimize their website much better and if they know how to place the ads in such a way to get the best response from visitors
- Branding of the site — a site with smaller traffic but gets frequent media mentions and enjoys a stronger brand can charge more for their advertising than a site that gets better traffic numbers.
Traffic is a factor in how much you earn from advertising — but it is not the only factor for determining how much you will earn. Of course, with more traffic, you stand a better chance of earning more revenues especially if you have the other factors working for you as well.
The best approach is to explore which type of advertising works best with your site. It is also important that you diversify your advertising revenues by using various types of advertising formats without distracting from the real content of your site (you don’t want your site to be nothing but one big advertising billboard).