Like most people in the creative industry, I know a fair few people who operate websites. Some of those sites are superbly designed and executed, others are a bit dull, and a minority are a right royal mess. It's also notable how few make real money.
Often, that's not a problem because they weren't set up for that purpose. A number are purely informational, like blogs. Then there are those that serve as recruitment tools, or exist for a short period to promote an event or festival. But some were created with profit in mind, and their owners can be perplexed as to why their HTML spectacular isn't raking in the cash.
I sometimes work with people launching new websites (though more as a copy and creative consultant, rather than a business advisor), so I've had cause to consider why monetising a site can be such an uphill struggle. It's a big question, and if I had all the answers I'd by typing this in a beach house in Barbados. However, I think the web has been around long enough to reach some firm conclusions - so I'm happy to stick my neck out and make this assertion: there are only three ways to make real money from a website. And here they are:
1. Advertising
I can almost hear you now, "But loads of websites carry advertising !" and they do. But look closely and you'll see the vast majority are running Google Ads. The Adwords programme is responsible for the majority of Google's income as it allows anyone to 'buy' advertising in the sponsored sections of the search engine's results page. Through a real-time, keyword bidding market, the cost of clicks on those ads is determined. But publishers of websites can also plug ads into their site and share in some of the revenue generated by clicks.
It sounds like a wonderful idea and the perfect way to make good money from any site. That is, until you assess how often you click on the ads you see online. Factor in the tiny payout Google offers per click and it becomes a less profitable model. I believe there are folk making a healthy income from the process, but I suspect they're a rare breed.
Therefore, the only way to make proper money from website advertising is to sell space directly to clients (or at least brokers like media agencies). Unsurprisingly, the competition is vicious and unless you can prove visitor numbers in the hundreds of thousands, nobody will be interested. That said, if you can deliver audiences on a comparable scale to The Mail Online, you'll find advertisers queuing at your door. For the record, that's about 130 million unique users a month.
2. Retail
One look at the plethora of charity shops, pawn brokers and tattoo studios flooding Britain's high-streets will tell you where the modern shopper's pounds are being spent. And thanks to some handy, affordable software, it's really quite easy to set up a online store. Actually shifting some units is an entirely different matter. If it's so easy for you and me to build a web store, it's easy for everyone else - which means the online retail market is awash with shops in the same way the high-street isn't.
So, anyone seeking to make their fortune from a retail website better have a sackload of fantastic products, a flair for search-engine optimisation, a decent marketing budget and a willingness to fight tooth and nail to bring in the punters. Giving up on sleep will also help.
Nevertheless, as ASOS, Amazon and BooHoo prove, there is money to be made from a retail site. Eventually.
3. Sell it
If you don't have the patience or inclination to go for advertising or retail, there is an alternative that is very rapid and very lucrative. Sell the whole thing to somebody else. Preferably someone with a bob or two, like Mark Zuckerberg.
Just look at Instagram, the photo sharing app and site. With a staff of about a dozen, some venture capitalist dollars and a bit of an idea, Kevin Systrom established a somewhat straightforward means of tweaking digital photos and showing them to other web users. After eighteen months in business, and without turning a penny in profit, Facebook kindly chucked a billion US dollars at him in return for his system. Which was nice.
He was accumulating subscribers at a breakneck speed though, and the new owners are notoriously keen on acquiring users and, more importantly, the data they leave behind them. But, if you have a site which pulls in sign-ups by the million, there is obviously a rather satisfying deal to be done.
And there you have it, three ways to make money from a website. None of them easy, nor predictable - and all dependent on that vital ingredient, traffic. Oh, and luck. Lots of luck.
Magnus Shaw is a copywriter, consultant and blogger
