The Ultimate Guide to Making Money with Ads on Your BlogWhen I tell people that I’m a professional blogger, the most popular question I’m asked is, “How exactly do you earn money blogging?” People have written entire books about this topic, so it’s hard to give them the 5-minute answer they want! Usually, I talk to them about ads, because they have a frame of reference for how that works. Most people have seen ads in newspapers and magazines, and they understand that brands will pay for this ad space if you have readers.

Today, I’m going to dive deep into how to make money running ads on your blog. This is not the only way you can make money with your blog, and I personally believe that most bloggers in most niches can make more money in other ways.

That said, I also believe that you should diversify your income. In other words, don’t just make money in one or every two ways. Make money in several ways!

So, keep reading if you want to figure out whether or not ads are right for you and, if they are, how to ramp up your ad income.

Should You Run Ads on Your Blog?

Before we even start talking about making money with ads, we have to answer the important question of whether or not you should even be running ads on your blog in the first place. You might notice that some blogs and websites, even those with tons of traffic, do not run any ads at all. It isn’t because they don’t understand ads. It is usually a conscious choice, because they know that ads could steal income from other ares of their blog.

Let’s say you run a fashion blog, for example, and you decide to start selling vintage and handmade clothing on Etsy.

One of the prime spots for any advertisement is at the top right of your blog. When most people scan a page, their eyes move in an “S” pattern, so the top right of the page is the first thing most people see.

You could put an ad their and make a little money from a third party… or, instead, you could put your own ad, telling people about the clothing you have for sale on Etsy.

Which is better… making a few pennies per view/click? Or making sales where 100% of the profits are yours? (It’s a no-brainer.)

Another great place for ads, if you are trying to get more clicks, is the bottom of a post. When people are done reading a post, they naturally want to do something else, and if they see an interesting ad their, they might click it as their next “activity.”

However, you could instead add a call to action at the end of your post that keeps people on your blog or has them do something that benefits you in some way, like sharing your post.

Which is better… making a few pennies per view/click? Or having someone stay on your site to read another post or share your post with their audience?

It’s not a no-brainer this case… for some bloggers, the money is better; for others, it is better to have your readers to take another action, because it helps you earn more money in the long run.

Another option to consider is that every CPM/CPC/Flat Fee ad could be an affiliate ad instead. (If you don’t know what those acronyms mean, I’m going to explain those next.)

With affiliate ads, you get paid a large amount (several dollars or even several hundreds of dollars depending on the affiliate product and program, but you only get paid when someone actually buys something. With the ads that we’re going to talk about in the rest of this post, you get paid a small amount, but your earnings are based on impressions, clicks or the amount of time the ad is displayed on your site. So, even when people don’t buy the product being advertised, you make money.

Which is better… making a large amount of money when a product is purchased or making a small amount of money for every view or click?

Again, there’s no right or wrong answer here. You need to test and decide which is better for your blog.

Some bloggers don’t run ads for a completely different reason – even though they could make a substantial amount of money, they don’t like how ads look on their blog. They would rather take another monetization path, even if making money with ads would be easier, because they like their content to have a cleaner ad-free look. This is a totally valid decision. It’s your blog, so you get to make the rules. 🙂

Making Money with Ads: CPM vs. CPC vs. Flat Fee Ads

If you do want to make money with ads, you need to understand the three different ad options. In the rest of this post, I’m not going to discuss affiliate ads. Even though these are technically ads and you can use them to fill ad slots on your blog, earning money with affiliate programs is a completely different strategy in my opinion. You won’t be super successful if all you do is throw a few affiliate ads on your sidebar (at least not as successful as you could be).

But we are going to talk about CPM, CPC, and Flat Fee ads. They each have their advantages and disadvantages.

CPM stands for “cost per mille,” which is a fancy way about saying that you’ll get pay for every 1000 impressions (pageviews). The average CPM rate is $2 – $5, so if your blog gets 50,000 pageviews per month, you would earn $100 – $250 per month with a single CPM ad on your sidebar.

CPC, on the other hand, stands for “cost per click,” which means you get paid a small amount every time someone clicks on your ad. In this case, it doesn’t matter how many impressions the ad gets. People have to click for you to get paid. It’s pretty average for about 0.8% of your pageviews to convert to a click, and average CPC rates are around $1.50. So, if your blog gets the same 50,000 pageviews per month, around 400 people would click on an add, and you’d earn around $600.

With a flat fee, you are paid based on the time you display the ad on your site. Most bloggers sell ad space by the month, and if you get the same 50,000 pageviews per month, you’ll have the most success charging around $100 – $250 for that ad space – the same as the average CPM rates we listed above.

Now, it might seem like CPC ads are the way to go, because you get paid more, but this isn’t always the case…

With a CPM ad or a flat fee ad, your earnings are directly tied to your traffic. The only real difference is that with a flat fee you are guaranteed a price, even if your traffic drops slightly, but the payoff is that if you have a post that goes viral and you get a huge traffic spike, you’re still only paid the same flat fee. With a CPM ad, you’re paid 100% based on the traffic you actually receive.

But the fact remains… with a CPM or flat fee model, you are paid based on your traffic, which you (somewhat) control. You just have to focus on writing great content and promoting that content. Basically, post your ads, and then go about your business as usual.

With CPC ads, you could write the best content in the world, but if people aren’t interested in the product/service being advertised, they won’t click… and if they don’t click, you don’t get paid. While 0.8% is the average, your click through rate could be a lot higher or lower. I know bloggers who get almost zero clicks, and I also know bloggers who have a click through rate of over 10%.

About a billion different factors can go into whether or not people will click, including…

  • ad placement
  • ad design
  • the relevancy of the product to the reader
  • the product price
  • the time of year (people buy more right before Christmas)
  • the size of the ad
  • your blog niche

In addition, the quality of your traffic will have a huge effect on your click through rate. Look at your bounce rate and the time spent on your website. If your bound rate is high and the time spent on your site is low, your click through rate will likely be lower than average.

The type of content you write also makes a big difference. If you write “entertainment” content, for example, people who come to your website might stay on your site for a long time and read multiple posts, but they aren’t in buying mode. This is common in niches like humor and celebrity news. On the other hand, if you write content that people are using to solve a problem, they are more willing to open their wallet, even if the item being advertised isn’t a direct solution to their problem. They are in buying mode.

So a CPC ad on the blog post “10 Celebrity Kids With Famous Parents” would probably have a lower click through rate than “10 Ready-to-Wear Dresses.” When someone is reading about celebrity kids, they are just looking to be entertained. When some is reading about dresses, they are at least thinking about products to buy.

In short, a CPM ad might work better, because you don’t have to get clicks – just traffic.

Split-Testing Your Ads

The only way to know what works for your blog is to split test. Also called A/B testing, this is when you change just one variable to see which option gets better results. In this case, you’re going to split test whether a CPM ad makes more money for you than a CPC ad.

Actually, I recommend testing different ad networks as well. Two ad networks both running the same types of ads can earn drastically different amounts of money. Test everything to see what gets the best results for your blog. Test, test, test!

Here’s how you test:

Step 1: Pick a spot on your blog. I recommend the top of your sidebar, but you can test any ad location on your blog. What’s important is that you test ads in the exact same spot. You cant test the first ad on your sidebar and the second ad at the bottom of your blog posts. The results won’t tell you anything.

Step 2: Run the first ad for at least 30 days or 50,000 pageviews. Any less, and your results won’t be as reliable. You want to make sure you have enough data to make your test worthwhile.

Step 3: Make a note of your results. How much did you earn and how many pageviews, exactly, did you have during the time period? So let’s say that you earned $94 and had 21,908 pageviews.

Step 4: Repeat the process with the second ad. Try to let it run for about the same number of pageviews, but again record your exact pageviews along with your earnings. Let’s say that you earned $147 and had 28,107 pageviews.

Step 5: Understand your results. You can actually repeat this process with more ads if you want to test as many ads as you want. Once you’ve done your testing, you need to understand your results, because the raw numbers don’t tell the whole story.

In our example, when you do the math, you earned 0.4 cents for every pageview. During the second month, you earned 0.5 cents for every pageview. So, the second ad would have been better.

The problem with this type of testing is that it is never 100% accurate because the traffic coming to your blog will vary from month to month, not just in quantitative ways, but also in qualitative ways. For example, if you test during the months of December and January, your results might be skewed because people are more in “shopping” mode during December, and thus more likely to click ads.

Your results will never be perfect, so test often to make sure you are always earning as much as possible with your ads.

With most ad networks, you aren’t just working with one brand paying a set advertising fee. Instead, you’re working with several brands through the network, and your ads will change from pageview to pageview.

Your earnings will change from pageview to pageview as well. Ad networks fill your ad space with ads that will earn you the most money possible, but it will vary.

For example, let’s say that a brand pays $3 CPM for $10,000 worth of ads. This example works with CPC too, but let’s stick to CPM for the example. The network will put this $3 CPM ad on your blog and on all of the other blogs who are also running ads… but that $10,000 will eventually run out. So, the ad network will move to the next highest-paying ad, and let’s say that one earns you $2.50 CPM and the brand has paid for $7,000 worth of ads. But then, before their money runs out, another brand pops in and pays for $3,000 worth of ads at $5 CPM, because they really want to reach people quickly. So, suddenly, you get a view pageviews that are paying out at a much higher rate, then you are back to $2.50 CPM. And then…

Ads are bought and sold quickly. What you want to look at is an overall average for CPM or CPC, to see which ad network is getting you the best rate. Some networks show you the individual daily or even hourly earnings, but I suggest you ignore them in order to look at the biggest picture. With one network, you might suddenly see a few clicks that earn you a ton of money, but then the rest of the month you earn a much, much lower rate.

On the other hand, with another network you might not see any super high rate spikes, but the average amount you make is much higher.

Ad Networks to Test

Ready to start testing? Here are some ad networks that you can join:

This is just a short list with a few options; there are dozens of other options out there. I recommend testing at least 3-5 ad networks to find out which performs best for you.

And keep in mind that just because ads are right for you today, doesn’t meant that will still be true five years from now, or even 5 months from now. Every few months, I like to reassess my blogging goals to make sure the space I’m devoting to ads couldn’t make more money devoted to promoting an affiliate product or one of my own products. Making money with ads is great… but if I could be making more money another way, I’d be silly to keep running ads.

No matter what type of ads you choose to run, the more traffic you get, the more money you’ll make. You can get started even if you blog is new or doesn’t have millions of readers, but ad income is directly tied to traffic. If you’re trying to get more traffic, I recommend the ebook Traffic Transformation: 21 Strategies I Used to Increase My Monthly Page Views from 17k to 400k+ in 10 Months, which has several great tips to help you find more readers.

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4 Comments on The Ultimate Guide to Making Money with Ads on Your Blog

  1. I think this was really insightful. Someone mentioned that its not worth running ads on your blog especially if you have low page views but didnt really explain why. I think explaining that placing an ad for your own product is more effective (atleast until you get higher page views) make so much sense! Thanks for this.

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