The Myth of Online Ad Revenue

Did you hear the reports about all that money to be made from online advertisements?  In 2006 alone, Internet ad revenue was estimated at $16.8 billion USD.  You have also likely heard of bloggers making thousands of dollars in just a short amount of time through online ads. If you believe this is another post about making money from online ads or how to optimize your site for the search engines, you are going to be disappointed.  I'm not here to tell you how to make money online but when you shouldn't be making money from advertisement on your site.

When I originally placed ads on my site about a year and a half ago, I actually didn't do it for the money but to give free advice.  Over the years I've had friends, relatives, and even a few clients that asked whether it was worth placing ads on their site.  I honestly did not know the answer to that question and decided it was time to try things out for myself.  How much money could the typical site make through online ads?
In early 2006, I placed online ads from various "advertisement" services on two of my former sites, Like that Idea and the WebCMS Forum.  By the second half of the year I also placed advertisements here at CMS Report.  While my first two sites are low traffic sites, has gained popularity and according to Alexa is currently ranked in the top 100,000 Internet sites.  Nevertheless, none of these sites are a Yahoo! or YouTube but I think they could be considered as typical sites in terms of visitors and content for most bloggers and small businesses.

So how much money did I make from my three sites?  I made $53.17 USD.  I don't think I'll be quiting my day job any time soon.

To be fair to some of the online ad services, I expect to me making a lot more money from them in 2007.   The expected revenue is not just due to expected traffic increases to the my sites, but also because some companies do not write out a check to you until you have earned a certain amount such as $75 or $100.  In other words I will be receiving money in 2007 partially due to the site visits 2006.

For all the time I spent on my sites, I consider $53.17 not that much money.  The low amount of money has me considering whether online ads are really worth placing on my sites.  While I can't tell you whether placing online ads on your site will be worth it for your...I have some opinions to which type of sites just are not worth sell out for the few dollars you may be making.

The following list contains my advice for when you shouldn't be placing ads on a site:

  • Online ads should not be placed on personal or family sites.  While sites that you talk about your family vacation or pictures from your wedding may be of interest to you, the site isn't going to bring in a lot of traffic to make much money.  Is it really worth selling out your family for a few dollars?  If so, it's time for you to take a self-esteem class.
  • Business sites should not have ads on their site for someone else's business.  This piece of advise came from a brother-in-law that runs a pretty good business thanks in part from his Internet site.  It just doesn't make good business sense to send a potential customer vising your site to another business, no matter if that business is a competitor or not.  It is ok, however, to place ads on your site for your own products or to another business you have a partnership with.
  • Open source projects  or charity sites should not have online ads on their portal.  I know this is controversial, but I just think open source projects or non-profit sites are hard to take serious when the first thing you see is advertisement.  I prefer to visit the open source sites that don't have advertisements.  If you are going to have online ads, please do it with a little bit more class.  For example Joomla! has enough class to be free of online ads on their portal page but does get some revenue from their forum.

So that's my working list of when not to place online advertisements on your site.  Anybody care to add more to that list?