Home-based e-business - an option for the self-employed?

 

Estimate of publisher earnings

A prospective publisher should estimate the amount of traffic required for his site to generate enough hits or sales in order to make a desired income. The below is an estimate of the potential earnings that can be derived from CPM, CPC, and CPA programs for a website with 10,000 page views per month. In the case of a CPA program, an average order size of $50 is assumed.

 

              Impressions   Click-Thro Rate      Sales      Commission          Earnings 

CPM           10,000                            $0.2-10                         $2-100

CPC           10,000                2%                      $0.01-0.5           $2-100

CPA           10,000                2%           4          5-75% per sale      $2.5-150            

Text Links         -                 -           4          $5-100              $20-400                                                   

 

From the above figures, it seems apparent that the payout from CPM, CPC, and CPA are similar but in practice, the actual CPC and CPA earnings depends very much on the site. In the case of Adsense, the payout rate for clicks differs dramatically depending on the actual keyword. The variation is even greater in the case of CPA programs. In general, the higher the commission rate, the harder it is to generate a sale. The publisher may wish to drive sales by advertising their site but this would increase the overheads of the business. Morover, since the margins for CPA programs are often thin, it is quite possible that the publisher may lose money especially if they are not experienced. However, affiliates can also promote merchants by means through their own opt-in mailing list. However, this is not easy to attain a large mailing list of committed invidividuals.

Selling text-links actually does not depend on the traffic that a site receives. Rather, it depends mainly on the “Google PageRank” which is a method used by Google to rank sites. Buyers of text links hope that it will help their sites to obtain a high PageRank in return and possibly more traffic from Google and other search engines. However, it is apparent with the recent changes in Google's algorithm that “PageRank” has become much less important. To maximize income, it is possible to put more than one program on the site e.g. join a CPM program, join adsense, promote affiliate programs and sell text links at the same time. Therefore it is quite possible to earn up to $500 with a website with only 10,000 page views per month.

Generally, it is not difficult to generate 10,000 page views per month for a normal web site with a moderate level of promotion. However, if one wants to go beyond 10,000 hits, it will require more effort and creativity to attract recurrent visitors. To earn a full-time income, one would have to operate one or more web sites with more than 100,000 page views per month which is extremely difficult to set up and daunting for the beginner. The alternative would be to set-up multiple sites with 10,000 or more per month. Besides being proficient in web design, the webmaster must also be proficient in promotion. Affiliate programs are now well established as an integral part of e-business in N. America and Europe but not so in Hong Kong . Therefore, prospective publishers must sign up with advertisers that are based overseas. One approach is to build up hobbyist web site targeting Chinese cusotmers, e.g. on watches, stamps and models, and have links to the appropriate retailers overseas. This approach would however be only successful if the items are more expensive or not available locally. Another approach that is taken by many is to set up a free adult website with a soft content with links to paying adult sites with a much harder porn content or retailers in sexual accessories.

Setting up a high-volume web site is not an easy matter for the beginner. A high degree of knowledge competency with the Internet, and also with the content of the web site is required in order to become a successful publisher. To earn a full-time income, several web sites may have to be set-up. However, once a web site becomes well established, advertisers may come to the webmaster directly offering much higher remuneration rates than would have been otherwise obtainable through the usual affiliate programs. Advertisers are often willing to pay rates of up to US$35 per 1,000 impressions in comparison to the figure of US$ 0.2 – 10 [1]The degree of monetary risk involved in setting up as a publisher is much lower compared to other types of e-business. The only risks involved are amount of time and money spent in setting up the website and promoting it.