What Is the Meaning of Website Advertising?

Web vs. Real-World Ads

Both similarities and differences exist between ads on websites and in the real world, such as those you find in magazines, newspapers and billboards. In either instance, one party pays to be able to promote a product or service in an area large numbers of people see every day. On the other hand, while placing an ad on a billboard or in a newspaper always requires a fixed-fee payment by the company advertising, website ads sometimes generate revenue for the site owner on a per-click basis -- the more visitors to the site that click the ad, the more the owner earns.

Third-Party Ads

When a website uses ads that generate revenue based on the number of clicks, a single third party sponsors and hosts them, usually for a larger and more diverse body of clients than a website owner would otherwise be able to procure. A well-known example of a third-party provider is Google, through its AdSense program. Merchants and other online outlets pay Google to be able to advertise through the program. Webmasters wanting to earn revenue from advertising agree to put the ads on their site. In this instance, advertisers and the websites who place their ads never come into contact.

Pitfalls of Per-Click Advertising

One temptation after putting per-click ads on your site is to click the ads yourself or have others click them for you. Whether or not you use Google AdSense, third-party advertising sponsors have the ability to track visitors based on their IP address -- and if they trace fraudulent clicks to yours, it could result in your being banned from the program. Another disadvantage of using a third-party ad program like Google AdSense is that per-click yields are often nominal -- and unless your website generates huge amounts of traffic and a certain percentage of your users click your ad, your potential for revenue can fluctuate over time.

Big-Name Advertisers

Another way to generate revenue from ads is waiting until you grow your website substantially and contacting large companies to advertise on your website. If your website becomes extremely popular or well-known, companies may even solicit you for the opportunity to advertise on your site. This process works in the same way as traditional advertising -- a fixed-fee payment upfront and, in some instances, a percentage of subsequent sales -- and generates more consistent and often higher revenue.