Thursday, December 1, 2011

The Parable Of The Lemonade Stand: Is Costing You Money From Adsense?

Imagine a lemonade stand. Entrepreneurs get the ingredients, start your business, and has dozens of customers each day. What he earns twenty dollars a day. Not bad for a humble lemonade, right?

Now, I throw in a twist: imagine the aforementioned entrepreneurs are in their 30's. They own the lot where the lemonade stand. The lot is located on a main road in a fast-growing suburban area. All lots adjacent to your business making thousands of dollars per day. Suddenly our lemonade stand seems pretty silly.

This concept is called opportunity cost, the economic consequences of choosing one thing over another. I'm learning about this the hard way - I've been doing cents per click that I could have been making dollars per click.

I will explain in detail a little more. As I mentioned before, profitable blog is the first I ever had. As my traffic increased, so did my earnings from AdSense. A few dollars a day until the ads, so it was finally seeing the checks come at the end of each month (I'm new to making money online, so I easily amused).

But I started to notice something: a few products in particular kept popping up over and over again in my blog (widget AdSense). "Wait a minute," I thought to myself, "these products, of course, convert, so if someone is willing to spend money on promotion." I realized I had inadvertently put in the bottom of the economic chain: I was paying a few cents per click, while another person was earning commissions on sales produced by these clicks.

I did a little research and starts directly advertising for these products with affiliate marketing. So far it seems to be paying off, my blog is to make more money.

But there is another advantage: I have complete control over what is posted on my blog. It is becoming a win-win situation: My readers are referred to the high quality products and earn more in commissions.

I can use AdSense, but I'm spending more of my first "real estate" in my affiliate marketing blog. Perhaps you should also consider doing this.

A note from Darren

As Kevin says, I have nothing against any of AdSense. In fact I think it works quite well in some of my sites. For me the idea of ​​"opportunity cost" is very powerful. For every decision you make to use any ad unit type in your blog (if it's AdSense, some other ad networks, an affiliate product, an ad is sold directly to an advertiser, an ad for a proprietary product that is a potential opportunity cost of that decision.

The key is to test different options. Kevin has been successful in replacing the affiliate ads instead of AdSense for the products of other members would not work, but could do an ad for your own product. For others, it could be about sharing Chitika ads or other ad network. For others, it could monetize by selling ads directly. For others it might be better to have no ads at all, but sell yourself as a consultant in your blog.


Anonymous said...

i dont think so

Post a Comment

Twitter Delicious Facebook Digg Stumbleupon Favorites More