Several weeks ago, we wrote about the problem with AdSense. Then, we looked at the possibility of alternative ad platforms. Today, Megan Dougherty of Firepole Marketing shares a controversial opinion: you should do away with advertising on your website altogether. 

Getting a website is easy.

Really easy.

So easy that anyone can do it.

Maybe you build it yourself on a platform like WordPress or Joomla, or maybe you buy one ready made from a service like Flippa.


You know what isn’t easy?

Making money from a website.

Not only is it not easy – but there’s a ton of options, and for every option oodles of competing advice on how best to do it.

Most of it sucks.

It sucks in a staggering variety of ways – sometimes the advice is old, sometimes it’s ineffective, sometimes it’s unethical – really, the ways in which advice about monetization can suck never ceases to amaze me.

(Don’t get me wrong! There’s plenty of GOOD advice out there too! Like here, and here, and here, just for starters!)

My least favourite piece of advice is to dump a bunch of ads on your site and watch the money roll in from advertising fees.

That’s just stupid.

Let me tell you why.

But first…

Why Do So Many People Think It’s a Good Idea?

Because it worked for a long time.

In the earlier days of the internet making a keyword dense, article website with a healthy dose of Pay-Per Click ads on it was a reliable way to set up an income producing blog.

You’ve heard the advice – some folks are still giving it: Exact match domains, long tail keywords, article spinning + Google Ads = profit.

Because it was so effective for so long – and because there was even MORE money in teaching people these systems – it’s still often considered the go-to way to build an income producing site.

There’s also another reason it’s still so popular as an idea. And it’s not a nice one, so brace yourself:

It’s easy.

It’s easy to set up a site, populate it with some content and run a bunch of ads – and let’s face it – the dream of a big fat passive income is one that’s hard to give up.

A few people still make money this way – and, I suppose,  maybe you could too – but it’s really not the best method any more, and it’s definitely not the most sustainable.

It’s time. The internet has grown up and moved on and so must we.

What’s Wrong With This Method?

There’s a couple of reasons:

1) You can’t beat Google

Google employs thousands of the smartest people in the world whose job is to stop businesses like this from working. You can’t beat them. Don’t try.

The reason for this is that it’s in Google’s best interest to make sure that people get the kind of results they WANT when they search. And for the most part searchers don’t want to have to click through many sites to find what they want. They want an answer to a question, or information about a topic, or something to buy, and they want to find it on their first click away from Google’s result pages. Google needs to give it to them, so the searchers will continue to use Google’s system, and they have a hugely complicated algorithm personalized on a person to person basis designed to give people what they want.

And it goes even further – there are some arbitrage issues. Google views websites like this – that exist only to funnel traffic to other sources as a form of, essentially, theft.

Let’s break that down from your perspective and from Google’s.

How you see it:

You have a site that is listed in Google’s search results, and you want lots of traffic so that when people find you in search results, or otherwise, then enter your site they can click on one of the ads you are hosting. You get paid for the click with money Google collects from advertisers. If this happens many times, you can make some money and everyone is happy.

How Google sees it:

They have a directory of websites that have the solutions to the problems of searchers, and when someone clicks on a link they find on Google’s results pages, Google wants them to find the information they are looking for, so that Google doesn’t have to deliver any pay-per-click commissions, and the user is happy with the speed and effectiveness of Google as a Search Engine.

When a site is designed to make its money off of advertising – it will never be the end of a searcher’s quest for information – they must click more times to find the information they are looking for. Google must process the commission, incur expenses related to doing so, and deal with a less satisfied customer – as well as an advertiser who is paying for something THEY could have gotten for free from search results as well.

Basically, Google sees ad-heavy sites as getting in between their users, and what their users want – and that’s not a good thing for anyone.

As bloggers, we cannot hope to cheat, shortcut or find loopholes through Google, and really – it’s not even in our best interest to do so.

2) You’re wasting precious attention

Even if this wasn’t the case – monetizing a site smaller than the Huffington Post with advertising is possibly the biggest waste of attention you can accomplish. When someone clicks an ad on your site – they are leaving your site. This means they’re not joining your list, commenting on a blog post, reading a product review or doing any of the myriad other things that could lead to money in your pocket. Follow this through to the next step and it means they’re gone – that customer lifetime value to you is, what, 4 cents? They’re gone forever and you have very little to show for it.

Let’s do the math on this so you can really see what I’m saying.

Let’s say that you have a website populated with ads, and you earn 20 cents (if you’re lucky!) every time someone clicks on one.

Maybe 1 in 100 people will click on and ad. (Again, this is a generous estimate!)

That means to make a dollar, you need 500 visitors to your site.

To make, say, $1000 a month, you need about half a million people to visit your site.

If you’ve got half a million visitors to your site every month, and all you can earn from them is $1000 – that’s a pretty poor use of traffic!

In fact, if you manage to hit those levels at all, it would be a crying shame of a waste.

What You Should Do Instead

What I’m about to tell you is very simple – but please do not make the mistake of thinking that it is easy.

Build an audience, and give them what they want.

Let’s define these terms:

Audience: An audience is a group of people who you have a relationship with and who are interested in what you have to say. They all generally have certain things in common – if nothing more than a shared interest in your subject matter. They read, comment on and share your blog posts, they respond to your emails, and they, occasionally, buy your products.

What they Want: When you have an audience as described above – they talk to you. It’s amazing, really, how much people will tell you about who they are, what they’ve done and what they need in their life. They will come right out and say things like: “I wish I knew what the best e-reader was.” Or “Why can’t I find out the best kind of professional to get financial advice from?”

These are things people say to people they like – so be someone they like.

Now, knowing you need an audience and building one are two VERY different things – building an audience isn’t easy – but it’s terribly worth while.

So how does it work?

Let me give you the quick and dirty version. (The long version would take ages – but if you’re interested, let me know in the comments and we’ll see if we can’t arrange something!)

  1. Define your ideal person. This is the person to whom you could provide the best service, would most enjoy working with, and importantly, has the ability to pay you for things.
  2. Attract their attention – you can do this through blogging, through social media, through networking – the only limit is your imagination.
  3. Get them on an email list and start showering them with value.  Try to solve a problem they have, or provide them some delight, for free! Then continue to give them useful, valuable information about your area of mutual interest – always asking for feedback and inviting questions and replies from them.
  4. Based on what you know about them, who they are, what they need and what they’ve told you – sell them something. Maybe your own product or service, maybe something through an affiliate – but the point is that it will be something you have pre-verified that they want to spend money on.

That’s all there is to it. 😉

But Wait – That Sounds Like a LOT of Work

It is. These things are.

The thing is that a passive income isn’t really passive. You absolutely, 100% can design and build a business that doesn’t involve a lot of hands-on work on your part – but doing so is the work of months or years.

And if you’re not involved – if you’re not more than the unseen creator of a website – then it’s not likely to last past the next Google update.

The real problem with monetization by advertising isn’t that it doesn’t work – it’s that it isn’t effective. For the amount of traffic you would need to see any money from an ad-monetized website, for all of the work it takes to get that traffic – you could make many, many times the money genuinely engaging with people, and directing them to resources they need.

If you want things to be easy – you get a job.

If you want something long term and sustainable – you get an audience.

Advertising, if it comes into this at all – is an afterthought. A tactic. A small component to a bigger strategy.

It should never be the whole story.

Megan Dougherty is the Education Lead over at Firepole Marketing. That means she works on training programs, blog content and closely with students tackling tricky business problems. Firepole Marketing is all about giving small business owners and entrepreneurs the tools and training  they need to grow their businesses and be successful.

Edited to add: There’s a great conversation about ads, CTR and strategy happening over in our brand-new Google+ community.

This photo is by Drew Stefani