I’m not going to call this a ‘definitive’ list, as the game rules are evolving every day, but I’m hoping that this information will serve as a thorough consideration of tried and tested business models that may fit your existing idea – or add a complementary revenue stream to your web business that maybe you hadn’t considered.

It is important to mention that many of these business models have their roots in traditional commerce models. Conceptually the model may be the same offline as online; however the mechanics and performance metrics differ in the online world.

Advertising Model

Overview: I have an audience. You pay me to promote your product/message to my audience.

(OK, I know! We all know what an advert is, however some of the other business models that will be featured are less traditional and involve more technical explanations; so for consistency I’m defining them all).

Who Pays Who?: Advertiser pays the publisher (website, ezine, application) to display their message to the source’ audience, according to the nature of the advertising product sold.

Specific Commercial Variants

CPM – (cost per thousand impressions), is commonly used to price online display advertising. Many online publishers use this as their primary business model. As a new or small publisher you may want to grow your audience and collect demographic data about your visitors to assist in a pricing benchmark.  Other variables also influence the price you can set, such as the visitor tendency to interact with advertising. Huge choice exists in the display advertising market, as publishers are free to sell their own display advertising inventory using an ad serving platform, or select an advertising network to fill inventory for them.

CPC – (cost per click), is used primarily for text- based advertisements. Google Adwords and AdSense are both examples of cost-per click advertising. In this case, the advertiser bids to have their ad shown when a user searches for a keyword that is relevant to the ad (or is reading content that contains the relevant keyword – in the case of Adsense) and pays only when a click is received, regardless of how many page impressions the advert may receive. This isn’t a business model that anyone can launch. Apart from the fact that the sponsored search market is pretty much sewn up, be aware that Yahoo! owns the original Goto/Overture patent – known as the 361 patent. Instead its best to act as a carrier of text based advertising as a search or content partner.

CPL – (cost per lead), is technically the same as cost per click, in that the advertiser pays for a ‘visit’ action; however this terminology is most often used in situations when user interest tends to have been further qualified.

CPA – (cost per acquisition), is used to describe conversion based advertising. In this case the advertiser pays only when their conversion metric has been achieved. A conversion could be a product sale or a new customer registration.  A CPA model can be a difficult model to launch a commercial website with. It may be best to operate a CPL model until statistical performance inferences can be made about your traffic conversion rates.

Affiliate Model

Overview: I have an audience and website similar to yours. You pay me for directly selling or promoting your product to my audience, almost as if the product were my own!

Who Pays Who?: Advertiser pays its affiliate partners on referred-user-completion of a specified performance metric. An affiliation can often be a long term business model, often lasting as long as the commercial lifetime of the user’ consumption of the advertiser product(s).

Specific Commercial Variants

Reseller Affiliation – an affiliate is paid a percentage share of the total revenue derived from a purchase of the advertiser product, from the affiliate website. Such share of revenue may be a one-off percentage of sale or a lifetime value share.  Many software, application and domain distributors operate reseller programmes. Reselling tends to work well for digital and download products, as physical product distribution costs can be prohibitive for re-sale.

Lead Generation – an affiliate website has a qualified mechanism for the collection and onward distribution of a lead to an advertiser. Many financial service providers offer this type of affiliate programme. If you have a content web site established in the life insurance sector, you could add an enquiry form to collect all the relevant user data, and provide this information to a life insurance provider. Such lead generation mechanism could employ either a CPL or CPA model, however an affiliated relationship by the very definition of the term, is one of commonality and similarity, therefore conversion rates tend to be much higher with affiliate lead generation as opposed to a simple CPL advertisement on a non-affiliated site. Higher commission can therefore be established as the much of the promotion and user intention is qualified by the nature of the affiliate content, as opposed to advertising content. Lead generation affiliations may also operate on a revenue share basis. As an example many Bingo game providers will pay their affiliates a percentage of the gaming revenue spent by a referred user over the lifetime of that user.

Advertising and Affiliate models are the mainstay of the commercial web; therefore require a fair bit of reference in any overview of online commercial models – so don’t be put off by the fact that we’re still on ‘A’ at the end of part 1.

In part 2. I’m going to detail Auction, Brokerage and Donation models. Please do add your comments and additional advertising or affiliate variants I may have omitted. Feel free to suggest any models from A-D that I haven’t mentioned yet!

Final Note: You will no doubt notice that I have refrained from referencing or linking to any specific advertising programme, network or affiliate offer. As theMediaFlow is impartial it wouldn’t do to direct or ’support by association’ in this particular post. If you want my personal opinion however; Tweet me up!

Resources:

Dosh Dosh: Well written, well researched and well informed blog aimed at beginners to making money online.

Digital Enterprise: Good theoretical content, from an academic perspective.

List of Top UK Affiiate Networks, from Richard Kershaw’s Quality Nonsense Blog.

1. Introduce an aggressive analytics procedure.

It matters not that the revenue you generate goes forward to support a cause, as opposed to generate a profit. An online donation is still a conversion, or ‘sale’. Analyse your traffic on a regular basis (at least monthly) to identify benchmark performance metrics and trends, and adapt accordingly. Using products such as Omniture SiteCatalyst, or Google Analytics (free), you can set your own criteria as to what is a conversion, though I would suggest the key conversion would be the completion of a donation transaction. You should on a weekly or monthly basis, look at the absolute number of unique users, by referring source of traffic and total number of donations for the same period. If you divide the total number of donations by the total number of unique users (by referral source) you will know your average conversion rate for the time period. You can then analyse each referring source individually to assess if that source provides quality traffic, i.e. traffic that converts at a rate equal to or higher than average conversion rate. If you have a spreadsheet whizz (or if you can afford a data analyst in your organisation) have them put together a pivot table with other comparable data, such as average donation value (site-wide), compared to average donation value by referral source. In terms of using the data, such analysis will show you how and where to focus your traffic generation efforts. If, for example you discover that a medium sized source of traffic, has a conversion rate half of the average and a low donation value – you know you could be using your time more efficiently elsewhere, by growing a smaller, but more efficient referral source.

2. Online advertising (for free).

It goes without saying that one of the best ways to attract online donations to your cause, is to advertise your cause to people online! As a charity you get to do this for free! Yes. Seriously. Free. Not everywhere of course, but on Google AdWords for example. Google Grants is the scheme that allows registered charities to apply for a free grant, of $10,000 a month to spend on AdWords. Of course there is a heavily scrutinised application procedure to avoid abuse of this scheme, and it does take a very long time to be approved. However for $10,000 a month to spend on one of the most responsive and efficient forms of advertising (search engine marketing), with the world’s largest search engine, who can’t wait a few months? Find out more about Google Grants.

Additionally; to raise brand awareness and profile you should take advantage of free advertising opportunities that exist with some of the display ad networks. AdJug, for example is one of the fastest growing, open and transparent ad-exchanges in Europe, serving over 1 Billion ad impressions a month, and offering free inventory opportunities to a different charity each month. Contact Nikki Staveley to find out if you qualify.

3. Use Social Media to Increase Donations

As a charity, you naturally have an engaging message and purpose that will strike a chord with many people. Social media is therefore a perfect and free method of interacting with your supporters, finding and attracting new supporters, and of course generating traffic and donations to your website. What is social media? In this case we’re talking about online media which allows members to link up, share information, establish a profile, contribute stories and develop two-way communications. Such examples of social media that facilitate this behaviour are Facebook, Twitter and Qype. Let’s be clear however that there are different ways of using social media; i.e. advertising on a social media outlet, or being an active and valuable member of a social media outlet. We’re talking specifically about being an active and valuable member of a social media outlet. As the first stage of the buying cycle is ‘awareness’, using social media to increase awareness of your brand, cause, values and work is an absolutely invaluable opportunity. Posting stories, interesting facts and time-sensitive campaign information is easily possible using social media, and all serves to engage your community of fans, friends and followers with your core message. Our recent work with GlobalGiving UK, a charity that supports real people and projects at grass roots level uncovered some incredible statistics and a case for expansion of social media strategy. Our analysis showed that Facebook and Twitter featured highly in the top referring domains for GlobalGiving UK traffic, and most importantly that this traffic resulted in conversion to donation at a far higher than average rate. In the case of Twitter this was twice the average conversion to donation rate, and with Facebook – even higher still.

Follow @GlobalGivingUK to see how they are communicating their message to Twitter friends or become a fan on Facebook.

1. Ensure your site will load without the ‘www’ prefix.

Ensure your .ht access file captures URL type-ins without the ‘www’. Unless ‘told’ otherwise, any URL entry should resolve to ‘www’ as a matter of course. Failure to make this simple change could result in users thinking that your site is down, broken, or over-capacity – none of which look particularly welcome or professional and mean you may have lost a potential customer.

2. Ensure your logo defaults to ‘home’.

When a function becomes a common convention; such as clicking on the website logo taking you to the homepage, this then feeds audience expectation. So much so, that we often use a website logo to go back to the home page rather than any other navigation convention, as the logo tends to be the biggest, brightest (and therefore quickest) single-click route home. It is essential to adopt this practise, as users may seek to re-orient themselves within your content, starting again from the homepage, if they do not find the content they sought on first attempt.

3. Clear and consistent navigable element

What good is all that excellent content, surrounded by beautiful ad modules if nobody can find it? Even if you get lots of traffic from search engines (have good Search Engine Optimisation) – you won’t be encouraging repeat visits or further tours through your content unless you have a clear primary navigation element which remains in the same place throughout the site. Best-practise sites nearly always have a horizontal primary navigation element, with second and third level navigation being on a left hand side menu. It is not compulsory to have your navigation like everyone else; the most important thing is consistency.

4. Clickable breadcrumb

A breadcrumb trail shows the user their path through your site and content. Many Content Management Systems will automatically generate a breadcrumb for you by picking up the page title and its position in the content hierarchy to display a simple trail. Additionally, if a user has arrived at a content page on your site via an external link or a web search, a quick glance at the breadcrumb gives the user an immediate picture of where they are and may encourage an extended visit if the original content was relevant and of interest.

5. Font size 12pt minimum or scalable

Web accessibility is the practise of making your website as accessible as possible to as many people, including those with physical impairment. Web accessibility is a considerable separate topic in itself, and as well as the legal and ethical obligations to ensure your website is as accessible to all as possible, there are very good business reasons to do so as well. If there is one single accessibility tip for increasing your revenue potential, it is to ensure your content is at least 12pt or can be scaled. According to the RNIB at least 2 million of the UK population are visually impaired, which is a significant consideration as a percentage of your customer base. Ensuring that your primary content is at least 12pt, preferably scaling larger, will ensure that you are not discounting this community.

7. Add a searchbox

Adding a searchbox is one of the single biggest wins for any website seeking to improve incremental revenues. If you are an e-commerce site (regardless of how simple and logical your navigation) users tend to favour a searchbox, rather than a directory, to find the product they seek. If you generate revenues from adverts on your content pages, adding a searchbox will allow you to surface relevant content more often. Again here, providing a free-text entry search box promotes a quicker route from intent, to content and the more relevant the content to the user query, the more relevant any ad or product content should be.

8. Searchbox look and feel

Regardless of whether your search box is a direct source of revenue (search results contain products or ads) or an indirect source of revenue (search results contain content pages with complementary advertising – therefore raising ad impressions), there are a set of look and feel practises to adhere to which promote greater and more successful use of the search facility.

• Make the searchbox a minimum of 26 characters wide (not high) and for e-commerce sites between 26 and 50   characters is optimal. Our Yahoo! experience tells us that bigger is better – as user queries become more sophisticated and ‘query string’ length increases

• Do not put any text (‘search here…’ ‘put your search here’ etc) in the searchbox as when scanning the page for the searchbox we tend to look for the ‘big white space’. Even allowing for the varying levels of user sophistication pre-filling a searchbox is definitely not necessary and may cause confusion

• Position your search box top right, or top and centre (close to primary navigation) both positions are a conventional best-practise and promote greater search engagement through ease of searchbox identification

Making these simple tweaks to your existing site, or ensuring that these usability foundations are an integral part of any new build, will ensure efficient revenue performance. Improving incremental revenue performance is a quick win and if you are lucky enough to attract hundreds of thousands of page impressions a month, such a win could be considerable. If you’re not on this scale yet, ensuring usable and efficient performance of your commercial website is an important part of getting you there!