Advertisements. Whether you like them or hate them, they are one of the means by which website owners are generating revenue. While for some the revenue from advertisements are enough to be the average American’s paycheck, for others it is just a nice way to get rewarded for hard work. Either way, even before thinking about what to do with the money you will make off advertisements on your website, what you should be asking yourself is if you are even ready.

One of the biggest misconceptions about making money off your website is that it if you follow the ’steps’ that the ‘experts’ say, you will be making money in no time. The first thing that website owners need to understand is that ’steps’ are different for everyone. Everyone has a unique website and to say that the same thing will work for every single one is impossible. Secondly, unless someone has a proven track record of monetizing multiple websites in different markets, they are not an ‘expert.’

Here are 4 questions that anyone thinking about having advertisements on their website should ask themselves:

1. Are Advertisements Right For Me?

While making money is an obvious reason for adding in advertisements on your website, it is important to determine if they are right for you. For example, if you have an e-Commerce website, it is important that if you do decide to incorporate advertisements on to your site that the advertisements shown are not taking way business from your own. Too often are websites focused on maximizing ad space that they forget that the ads themselves may be competing businesses.

2. Why Would Companies Want To Advertise With Me?

Here is a big part of the equation. If I am a sports organization for example and I am looking to place ads on particular websites, I will look for sites that are 1) relevant to my company and have 2) traffic value. The best way to think about this situation is as if you are a selling your car. If you want to get the most profit, you need to make sure that not only is it presentable, but that you have all the paperwork in order.

3. Do You Have A “Target”

If you finally do decide that advertisements are the right route to go with your website, you should develop a core group to ‘target’ as far as advertisements go. This means that you should focus on getting advertisements on your site that ‘compliment’ the content you have. A great way to find advertisers that are relevant to your site is to look at sites similar to your own. See what companies advertise on those sites and keep them in mind moving forward.

4. Figuring Out Advertisement Costs

Another big question that needs to be asked is how much you could potentially make. This ties into #2, in that your site traffic will play a big part in this.

To help you understand how much you can potentially charge/make off of advertisements on your website, here is how you can figure it out:

CPM = Cost per 1,000 Impressions, Page Views: Impressions

Question: How much will you charge for every 1,000 impressions (page views)?

Sitution: If I have a 125 x 125 pixel advertisement space with 10,000 page views a month, I am thinking about charging $10.00/month.

Advertisement Cost/Page Views x 1,000 = CPM

$10.00/10,000 x 1,000 = $1.00 every 1,000 impressions

Your CPM tells you how much advertisers will be paying you per 1,000 page views. After you have this number, find websites similar to your own and work out their CPM based on their own advertisement rates. Be sure to take into account how much traffic they have. If you are charging the same amount ($1.00 per 1,000) as a site with four times your traffic, adjust your rates accordingly.

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After asking yourself these four questions you should be able to determine whether or not your website is ready for advertisements. Remember to always ask questions if you are unsure and that your website ’space’ is valuable and that you should never give it up unless it’s for a good reason.