Basic Business Models to Make Cash Online
There are many ways to make cash online. But, in essence, you can classify various ways to make cash online into three basic business models: CPC (cost per click), CPA (cost per action), and CPM (cost per mile impression).
In CPC model, you display an ad on your web site and you get paid when someone clicks on your ad. So if nobody clicks on your ad then you won’t make cash. The amount of money you earn when someone clicks on your ad depends on what your niche is and where your visitor comes from. Some niches like insurance and finance tend to pay higher while some other niches tend to pay lower. In addition, if your visitor comes from an area targeted by the advertiser then you will get paid more. This happens because CPC uses auction to determine who get their ads displayed. Obviously, the more people bid on certain keyword and customer segment, the higher the cost per click is.
In CPA model, you also display an ad on your web site. But here you will make cash if the visitor clicks through your ad and does something as intended by the advertiser. The desired action could be buying a product, signing up for a service, completing a survey, and more. You will then get certain amount of money or certain percentage of the transaction value.
In CPM model, again you display ad on your web site. The difference here you will get paid based on the number of impressions the ad get. No matter whether the people click on the ad or not, you will earn money based on the number of impressions the ad get. In this model, you will make more cash if your visitors are well targeted to the ads because the advertisers will be willing to pay you more that way.
Besides these three basic models, there are also other models. For example, the advertiser can pay you for ad space for certain period of time (usually monthly). No matter how much impressions or clicks the ad gets, you will get paid a fixed amount of money. For many publisher, this is a good way to make cash because the revenue is more predictable. While on CPC, CPA and CPM your revenue could vary depending on the performance of the ads, here you know for certain how much you will make from the ads. The downside is it’s more difficult to find advertisers who are willing to buy ad space using this model because - practically speaking - the risk is on their side.
So, which model should you choose? That depends a lot on your situation. If your niche is product specific, CPA could be a good choice since the likelihood that people will buy something is higher. If your niche attracts a lot of visitors with relatively low buying intention, then CPM could be a good choice for you since you get a lot of impression (but with low probability that they will take action). If your niche is something where many advertisers bid in, then CPC could be a good choice since the cost per click is higher. Again, it depends on your situation. Your best bet is to experiment with each of them and try to find which one works best for you to make cash online. Of course, you can use more than one models. For instance, you can use CPC and CPM at the same time. As long as you get someone who are willing to pay you then why not?
In any case, there’s one thing you need for all the above models to work: traffic. If you don’t have traffic, it’s unlikely that any of the models above will work. On the other hand, if you have traffic then the chance is high that the models will work. It’s just a matter of choosing which model will work best. So what you need to think about initially is not which model to choose that will make you the most cash. Instead, it’s how to get people to come to your site.