by Irene Lizarraga

Created on: June 30, 2009   Last Updated: March 29, 2011

Does the traffic on a website directly affect its advertising revenue? A website who doesn't get any visitors hardly will make any money out of them, and won't be able to enter contracts that involve a minimum number of displayed ads on a certain period of time. However, there's more factors than raw traffic statistics that will greatly affect the income your website generates from advertising. Traffic is just one of them, as are the advertising platform the website is using, the people who pay for those ads to be displayed, what kind of audience does that website attract...

The first factor to take into account is the advertising program rules. There's three basic models of advertising revenue programs, and  the w ay traffic affects their revenue varies:

The first one involves a contract for a number of impressions over a certain period of time (usually called "a campaign"). This one is highly affected by the website traffic. The more traffic the website has, the more adds impressions can be sold and campaign goals fulfilled. It also requires the most specialist business knowledge from the publisher. Sponsors need to be contacted for sales, and contracts need to be arranged since the prices for impression will change depending on the sponsor. In this case, the sponsor doesn't care about people actually clicking in the adds, just that they are displayed. Of course, if they don't get any traffic from a website they probably won't renew the campaign so websites with very specific audiences are more valuable in general.

Other programs will only pay for clicks, not for impressions. This means that a website with lower traffic but higher click-through rate can make more money than one with much more traffic. If the website audience stays the same but increases in numbers, the revenue will be higher but that's not directly proportional to the number of visitors. Programs such as Google Adsense use this system.

A variation on the pay per click model is pay-per-sale or Cost-per-action. The website is only paid when the user finishes a specific action on the advertiser's website (buying an item, like in Amazon associates, or filling a survey, registering for a newsletter). This model is also less affected by traffic than it is by how well are its audience and the adds matched (targeted content), but it's mostly interested in new visitors since it's not expected that the same visitor fulfills the same action more than once.

Due to those different advertising models, traffic is an important factor on a website advertisement revenue, but in most cases it won't increase advertising revenue proportionally to the increase in visitors. It's even more important to increase the amount of targeted traffic, and signing up for the publisher programs that better suit the website and its audience.

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