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Revenue Model

- The business plan for a company or website to make money. ()

- The system design by which a business monetizes its services. (Wikipedia)

Different Revenue Models Which Can Be Implemented On the Internet



The Advertising Revenue Model

- One of the oldest and simplest to implement. This method borrows heavily from the business model that newspapers have used for hundreds of years. The idea is simple. Attract eyeballs and then sell space to other companies or individuals who will pay you to put ads in front of those eyeballs. For use on the Internet, the advertising revenue model breaks up into two main subcategories: direct and contextual advertising.

Direct Advertising

- The most traditional method which involves selling ad space directly to businesses on a monthly, impression based, such as CPM (cost per 1000 web site impressions), CPC (cost per click), or other direct agreement. This revenue model typically involves the most work, but can also reap the highest amount of income. Direct contact and relationship management is often required and your business may need a dedicated sales department to handle the selling, billing, renewals and fulfillment of direct advertisements.

Contextual Advertising

- Similar to direct advertising in that the rates may be determined in CPM or CPC but in this case the ads are served through a third party, such as Google Adsense, Chitika, or Kontera and are matched based on the content of the particular website or web page in which the advertisement appears. This revenue model requires much less work than direct advertising as a third party is doing all of the selling, billing and fulfillment for you and the only work required may be adding and modifying code of an existing web page. Of course, this third party is not going to perform these services for free so your overall income may be significantly less.

Selling Your Products or Services

- By selling your products or services directly, your website is not sending business elsewhere or providing a percentage of the income to anyone else to provide the services for you. Providing a needed or trusted product or service is one of the most traditional and successful revenue models. Since you are selling products or services, you must provide much more than advertising.

Affiliate Marketing

- Simply selling the products or services of another company and taking a commission on the sale. Spreading related ads and links through your site to companies that sell similar products or services can generate a high level of commissions depending on the number of eye balls viewing those links or ads. There are many affiliate marketing resources available and many companies provide a marketplace to choose from. Large companies, such as Amazon and Ebay, also provide their own affiliate program.

Premium Subscriptions

- The equivalent of a newspaper charging a subscription fee for delivery. It can take the form of a premium members-only forum or message board, a premium email list, or even a blog or website with access to content, videos, tutorials, support and more. The benefit of the premium subscriptions revenue model is that your income is more predictable from month to month and not necessarily susceptible to cyclical variations in advertising or product markets. Just think, have you ever paid a monthly fee to a company for several months or several years?

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Combinations and Variations

- These are some of the most popular and successful revenue models used on the Internet. Many can be combined or varied and the surest form of success is to experiment with all of them. If you produce popular quality products, services, or content, one of these revenue models can work for your business.

Read more: What is a Revenue Model? |

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