AP 0096: How Do I Determine the Best Monetization Strategy for My Site?

AskPat 96 Episode Transcript

Pat Flynn: Hey, what's up everybody? Pat Flynn here and welcome to Episode 96 of AskPat. I'm here to help you answer your online business questions five days a week.

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Now let's get to today's question from Josh.

Josh: Hey Pat, how's it goin' my friend? My name is Josh and I live in Las Vegas, Nevada. And I've found what I believe to be a solid niche, which also has a projected increase in popularity in the coming years. The product the demographic seeks is a service that can be done in many different creative ways by a number of small to medium sized businesses. These businesses see mild success, but are largely undiscovered by the niche, as most of these buyers know only of a few variations of this service. There's currently no one Web site that serves as a one-stop hub, an educational resource, for this niche. Our aim to create this site—I want to feature each business's unique service on it's own beautiful page on my site. Given your SEO strategies, and the lack of quality competition, I feel that top-ranking is attainable and success would bring tons of leads to these businesses that I feature on my site. While I'm excited and passionate about creating this needed resource for my niche, I'm stuck on the details of monetization.

Ad space is a given after securing this traffic. But I'm not sure how to handle the leads that I'll be generating for these businesses. Do I negotiate deals with each individual business? Do they pay me a subscription to be on the site? Or maybe something I haven't even thought of. Thanks so much Pat, I really appreciate what you do. Keep up the great work.

Pat Flynn: Josh, thank you so much for your question, today. Very thorough question, lots of pieces and parts to it. But basically it comes down to monetization and how do you monetize a site where you are getting and gathering other people in that niche together? How can you benefit from that? Well obviously, like you just said, there's advertising. And you can do that in several different ways. You can basically rent space out on your website. If you have enough traffic coming to your site, and if you create these special pages for each of these other companies, that's going to help you with your rankings and your authority levels. So I definitely would recommend doing that. That's something I actually do myself. On SecurityGuardTrainingHQ.com, there's about 400 or 500 companies in the U.S. that I highlight on their own specific page on the directory. If you go over there, you can check it out.

But one thing you could do, is if you have all this traffic coming to your site, is you can just rent out space on your site. Basically create banner ads that you could sell for a monthly fee to have people or other companies post their banners up there. And you can have it done in special tiers as well. For instance, you might want to create a PDF file that will show people where on your site their banners can be placed. And there might be certain packages people can buy. For example, if they are shown on the front page, at the top of every post and also the top of every sidebar, that might be X number of dollars per month. And you know, lower price for the less visual or less prominent spots on your site. And actually I did this, when I first started doing online businesses. This is how I made my first advertising dollars online. No, actually it started with Google AdSense. But beyond that, I did what I call private advertising, because you're creating these private deals with these companies for them to put banner ads on your site. And the big thing I would recommend for you Josh, and anybody else out there thinking about doing private advertising is this: Don't sell yourself short. You have the ability to make your own price. And if you have the traffic and there are companies out there who want to get in front of that targeted traffic, they're going to be willing to pay for. So make sure you do some research. Go into Google and see how much companies like them, or how much those companies might be paying per click in Google for specific keywords. That'll give you a good baseline or an idea of exactly how much money these people are spending. I made the mistake of just biting, you know just getting on with the first person who—that sounds weird—by saying yes to the first company who wanted to advertise. I remember I was so happy, and even though it was only fifty bucks a month, I was completely happy. I remember the next month, I found another company and they were like, “Oh can we get in front of your traffic on your site?” And I was like, “Sure.” And they were like, “How much?” and I was like, “A hundred bucks.” And they were like, “Click. Done.” And I was like, “Hmm, that's weird. That's kind of a fast reaction.” And I did the same thing to another company. I said, “250 bucks”; click, boom, so fast. So I eventually started to test and try different price points. I was getting about $350 a month for a little 125 by 125 pixel advertisement that was shown on every page, but it was in the sidebar of my site. So $350 a month. But the lesson of the story is, when I first started I just jumped to and said yes to fifty bucks a month, when I could've probably made much much more if I understood how much value I was being actually able to provide to these companies who wanted to get in front of my traffic. So just basic banner ads or private advertisement space, which you can create like a media kit, a PDF file that sort of highlights the spots on your page and your website where their banner would be featured and the different price points.

And also another tip would be to—if people extend their periods of time, if they're going to be working with you as an advertiser you might want to give them a little bit of a discount. So what I mean is if you, say for example, are charging a hundred bucks a month for some good real estate on your site, you could say, “Well, I'll charge you 250 if you go to three months.” So they're saving fifty bucks a month. That way, they're on there for longer, there's less work for you to do to try and deal with the turnover once that time period expires and things like that. And there are WordPress plugins out there, and they are always evolving, that'll help you manage those kinds of advertisements on your site. I'm not going to mention any right now cause they might be out of date. But just look up banner advertisement or advertisement rotations. There's also sites like BuySellAds.com that allow you to do that. And they take a little bit of the upfront cost, being the middle man.

Okay. Other options, beside just straight-up banner advertising. And you mentioned some of it. Do you pay these companies to subscribe? So what that means is, it's similar to banner advertisements, where companies are paying you up front to have a spot on your site, but it's more of a directory. And the bad thing about this, and also the banner advertising is, people or companies will have to pay you before they see any results. And that could be a very hard sell, especially if you're a brand-new company and you don't have that much traffic. Maybe it's completely targeted traffic. But a lot of times these companies, they just look at the numbers, right? It's a hard thing to do, to tell companies that they might get leads from paying to subscribe to be in a portion of your site, whether it's a directory or banner ad.

I prefer going the pay-per-lead route. And this is very easy to sell because companies aren't losing any money upfront. They are only paying you when they make a lead. So you're basically earning a commission per lead. Now this can be a little bit wonky, as far as tracking, and some companies will have the ability to help you track all this, and it's similar to affiliate marketing. But other companies, it's not quite as easy, and you'll have to deal with these companies individually. That's something that at lot of people struggle with. This is like real business, you're actually getting on the phone or on Skype and talking to companies and making deals. And the negotiations are going to be different with every company. Although again, this is your site, this is your traffic, this is your business. You can choose how you want to run it and what your price points are.

A better way to control this is to actually collect the information up front from your leads and then sell those to these companies. So what you do is, you can either have your traffic fill out a form on your site, where all that information that these companies would want would go. So they fill out the forms and that information gets sent to you, and then you can sell that information to these companies. Now of course you want to be upfront and there are some legal things involved with collecting that sort of information, so make sure you check with a professional. But this is how a lot of people in a ton of industries do this. Just think of insurance companies, college education companies, you may have heard commercials on the radio for certain companies or websites that are . . . I think there's one called ICanAffordCollege.com, right? That's not a college education Web site, that's a college education lead-generation website. So what they do, and they're spending a ton of money on advertisements—they're putting banner ads on all these sites, they're paying for T.V. time and radio time—for people to go to their site, and they fill out that information, and then they hit submit. And then they connect them with these different educational institutions that will pay good money for each of those leads, if people go ahead and sign up for those classes.

So that's the similar approach that you'd want to take. But again, it's going to take a little bit of time and a little bit of practice, I guess you could say. The con about that is it's more manual labor, especially at first, but over time you can start to begin to create a process out of it, or even hire someone to help you as well. Now instead of filling out a form, I know a lot of people who also use the phone in that way to collect leads. And there are different ways to do this. You can actually have, or pay a VA to collect phone calls. And you can track those phone calls and have special numbers for different companies, for example. There are a couple companies out there— and then again, this is something I've never done before, I don't track phone calls. But there are companies I know about, like CallRail.com, and there's also one I believe at Grasshopper.com, those deal with phone and tracking and using cell phones to collect data and things like that. Not really my cup of tea, but that is another option for you. But again, it's going to take a little bit of time to figure out this pay-per-lead thing and I will be honest with you, it's something I explored for SecurityGuardTrainingHQ.com, which is one of my niche sites. I wanted to have security guard training companies and collect leads for those companies. The issue with that was, however, every state has a different set of requirements and hundreds of companies within each of those states, that it would be impossible for me to track in a way that's convenient for the end user. I'd have to have every single company in every location, every city. And you know, it can be done but it's a huge job and I started to focus a lot of my attention elsewhere.

Now another thing you could do, is if these companies have an affiliate program, you can automate this entire process. If these companies have affiliate programs, you can get a tracking ID from them, and just send people through those links to their site. And then boom, you're done. That's all you have to do to take care of that. So you have traffic, you get this affiliate link, which then points to those companies, and then the companies take care of the rest. They might have the forms on their site to fill out instead of you taking that information. But again, not all companies have affiliate programs. It is something you might want to check though because there are companies out there who don't advertise that they have an affiliate or a partnership program, but they do.

Actually, quick story. When I was doing my site, GreenExamAcademy.com, which I still am doing, but when I first started it I wanted to be an affiliate for this company that was selling practice exams for the LEED exam. And I looked on their site, just like I do for other companies, and there was no advertising affiliate program. So I ended up calling them. And I called them because I knew their number, because I had done banner ads with them before and I said, “Hey, by chance do you happen to have an affiliate program?” And they said, “Oh yeah absolutely, we just don't advertise it.” And I was like, “One, you're crazy for not advertising it because you could potentially grow your sale's force with hardly any work from there.” But I think they wanted to make sure they knew who was going to be promoting for them. And when I asked, because we had a great relationship, they decided to put me in it. For four years now, I've been promoting those practice exams, earned almost $200,000 selling their practice exams. It doesn't hurt to ask. On another note, if those companies don't have an affiliate program, you might want to connect with their webmaster or their chief marketing officer to see if that's something that they might be interested in. And if you know a little bit about affiliate marketing, you can impress them and actually help them out, which will then help you out as well. But that's as far as I'm going to go into that because there's a lot of nuances there when it comes to what affiliate program to pick out or which one would work or be compatible with them.

But anyway Josh, I hope this helps answer your question. Really what you want to do is, you want to test. You want to see if any of this stuff works and some of it might and some of it might not. And also, you want to see what's most convenient for these companies you're going to be working with as well.

Oh and before I finish up today, I also want to mention, don't forget about your own products. If there are a lot of other companies there that are doing amazing things, helping this target audience that you have, perhaps you can do something even better. And that way you wouldn't have to split any of the costs; you could control the user experience, have people on your site and promote your site for you, become affiliates for stuff that you have. And that's the long-term game. Of course, that takes time to create your own products and things like that. But you know, I've done that myself before, I'm doing it right now. There is definitely something to be said for taking the time to create your own stuff that's going to keep your target audience within your brand. And of course, if you're trying to sell more things down the road, the easiest person to sell to is somebody who's already bought from you.

Josh, thank you so much. An AskPat t-shirt is going to be headed your way. For those of you listening, if you have a question you'd like potentially featured here on the show, just head on over to AskPat.com, and as a reminder for all of you, head on over to AskPat.com/app and download the free iOS application. That's going to make it incredibly easy to download this podcast, my other podcasting content. And finally, I'm going to end with today's quote, from Laurence Olivier, and his quote is: “Have a very good reason for everything you do.” Thanks so much, and I'll see you the next episode of AskPat. Peace.