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Online Advertising

Tags: online web advertising, referral program, ads program, Cost Per Click, Click Through Rate

More and more people are joining the Internet and using it to search for products and services. This is creating a global trend where more and more money is moving online. It is also a great way for advertisers to reach a more focused group of possible customers since the Internet connects together people, products and services.

Online advertising has many sides: email advertising, advertising networks, search engine advertising, referral programs, and the most important of all: web advertising.

So, how could you benefit from online advertising. On one hand, if you already have a business or a product or service to sell, you could join one of the many advertising networks and begin placing ads on people's websites, thus, referring traffic to your site and increasing your sales.

On the other hand, you could start a website (if you already don't have one) and place those ads there, referring some of your visits to the advertiser site. This could be a win-win scenario if you use a contextual advertising service such a Google Adsense, where the ads are in sync with your website content. This would truly help some people find the services or products they were looking for.

Online advertising is also a very well proved method to build passive income, since once you have done the initial time and effort investment of building a website, you can profit for it for many years without having direct intervention. This is truly income on autopilot as it is often called.

If you want to become more familiar with online advertising, you need to understand the following basic concepts:

CPC - Cost Per Click, it is very common that the pricing of online advertising is based on a performance model. Usually advertisers only pay when they gain a benefit, like a visit to their site. This is why the Cost Per Click model is so widely used. The CPC can be anything from $0.01 up to $50.00 or even more, it all depends on they keywords. On the Internet, usually porn sites and casinos pay the most, but they are not allowed into some of the biggest advertising networks (such as Google Adsense). Other high-paying keywords include those related to financial products (loans, credits, mortgage, credit cards) attorneys services, medical services and products (most notably the asbestos cancer) and car and travel related keywords.

CTR - Click Through Rate, It measures the success of an online advertising campaign. For example, a CTR of 2% means that for every 100 times a particular ad unit has been shown, there have been 2 clicks. There are ways to increase your CTR, usually involving ad placing and ad-color scheme optimization. Although it is against the TOS of many advertising programs to disclose your CTR, a general estimation could set up the mark around the 1% for someone new into the world of online advertising. With some ad optimization and spending time learning how to do things properly (like you are doing right now on this site) you can increase your CTR to reach double figure, the 10%. However, it takes time and practise.

Finally, if you want to increase your online advertising earning, all you have to do is increase your CPC or your CTR. That is it. There is no more magic beyond that. Simply put: Money earned = cost per click X number of clicks. It is worth mention that some people pretend newcomers to pay up to $50.00 for books and other material containing magic receipts for online advertising. I just give you the formula to earn more money from your ads, I hope I just saved you some money, so you don't start from the red numbers! (Remember that the point is to make money, never to loose it.)

If you have found that maybe online advertising is no for you, feel free to see a list of other passive income examples

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