Unconventional Ways Web Sites Generate Revenue
27 Nov 2006

Unconventional Ways Web Sites Generate Revenue

27 Nov 2006

Almost all web sites generate value for their owners in some way. The modes by which sites create value can be straightforward like direct online sales or less immediate such as helping to build brand or supporting the sales process. While much has been written about conventional revenue channels, little if anything has been discussed about more indirect sources of value. We strongly feel that the indirect sources amount to a very significant and important component of the overall revenue stream and should, therefore, be understood and carefully considered. To this end, this article presents the entire spectrum of ways that web sites can generate value for their owners.

Established Revenue Channels

The established modes by which web sites create revenue for their owners include direct sales of goods and services as well as advertising. These are straightforward revenue models and are briefly covered below to provide a clear contrast between established channels and those that are not usually considered but that are equally important.

Revenue through Direct Sales of Products and Services

The most direct way that web sites create revenue is through online sales transactions of goods or services. Anyone who regularly uses the internet is very familiar with web sites that sell products. Sometimes these kinds of web sites have broad inventories like Amazon.com and other times they only sell specialty items. In addition, many corporate web sites such as Apple.com and Adobe.com have very large ecommerce sections aimed at selling their own products.

Some web sites do not sell goods but rather offer services. Examples of these are airline web sites such as the Northwest Airlines site that offers air travel for sale. Another category of sites that sells services comprises of web sites that are driven by paid membership such as many dating sites (e.g. Match.com), online rental services (e.g. Netflix), online applications (e.g. Basecamp), and other such services.

Revenue through Advertising

Another very common way that web sites generate revenue is by placing advertisements on their pages. There are many different kinds of advertising options that included pay-per-click, pay-per-impression, pay-per-call, pay-per-transaction, etc. and more advertising models are being added constantly. At Montparnas, we also consider other non-standard paid promotion methods as advertising; they include affiliate links and pay-per-post, a practice where bloggers are paid to write favorable things about products or companies.

Unconventional Revenue Channels

Although a lot has been written about the established revenue channels mentioned above, little attention has been paid to less direct and less evident ways that web sites generate revenue for the owner. These unconventional channels can sometimes generate more revenue than established ones, and they almost always are significant enough to command careful attention in how they factor into the overall user experience design.

Increasing Brand Value

One critical way that web sites contribute to an organization’s revenue flow is by enhancing the value of the its brand. There are various studies that show that prospective customers judge the strength of the brand of companies by their web sites and by their rankings within search results for related keywords. Companies that do not have an internet presence or have web sites with poor user experiences are missing out on potential revenue that an effective web site can generate for them. Web sites that improve the perception of a brand ultimately aid in driving and converting sales; therefore, it is difficult to understate the importance of this factor.

Propel Prospective Sales

Another vital way in which web sites generate value for their owners is by directly supporting and propelling prospective sales and thus increasing the conversion rates of those sales. This is a HUGE point that is very rarely considered, but that is crucial to the financial well-being of the organization. Neglecting this marketing tool can mean massive foregone sales revenue.

These marketing web sites support and propel sales in a number of different ways. The most effective of these is describing and marketing the products or services that are being offered. Companies also utilize web sites to advertise the superiority of the organization as a whole. For example, Montparnas’ web site is meant to list the breadth of our services, distinguish us from our competitors, and convince our visitors to choose Montparnas for their user experience design needs.

In addition, many marketing web sites not only make the marketing pitch to prospective customers but also drive customers to visit physical stores, to call a phone number, or to transact the sales in another way. On our site, we encourage prospective clients to call us directly, email us, or submit an inquiry. Some great examples of these types of marketing sites are corporate web sites for car companies like Audi, sports goods manufacturers like Head, and consulting agencies like McKinsey.

Supporting Existing Customers

Web sites can also help to improve customers’ overall experience with a company and enhance their loyalty. This can be accomplished by providing resources and support mechanisms for customers as well as helping customers to connect and share tips, tricks, and experiences. Many companies have large support sections within their web sites or as stand-alone sites to help their customers get the best from their products. For example, Microsoft has an extensive resources section that helps its customers learn how to get the best out of their Office suites. Other companies like Autodesk provide their customers with communities where they can share not only product tips, but also professional tips, exhibit their work, get useful tools, and connect professionally. By providing these web-based services to their customers, these organizations effectively increase the average lifetime value of their patrons.

Revenue through Donations

Often overlooked are web sites that drive revenue for their owners via donations, but these account for a rather significant group and encompass almost the entire non-profit vertical. In some cases donations are accepted online, and in other cases visitors are directed to make donations by phone, postal mail, or other means. Web sites are incredibly adept at facilitating smaller transactions which many donations tend to be. This is a vast underserved and unexplored space that can help many organizations attain funds necessary to provide their services. Some examples of web sites that solicit donations online include Red Cross, the United Way, and the Gates Foundation.

Generating Increased Value from Web Sites

The value that web sites generate for their owners is often very great. Consider how much revenue your organization would lose if you simply closed down your web site, and you will get a very good sense of how much it is worth. Even if your web site is not an e-commerce site or one that generates revenue through advertising, you would likely shudder at the thought of shutting it down. I know that Montparnas would lose a ton of business if we did not have a web site to support our brand and to market our services.

Because a web site generates significant value for its owner, it is important to identify the various ways by which it drives revenue and to ensure that the site does so effectively. Optimizing these channels means global improvements that can amount to considerable gains in revenue. Imagine if you could improve sale conversions by 5% or could convince 5% more prospective customers to buy your products or services, visit your site and click your ads, or make donations. It is certainly a thought that commands careful consideration.

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  1. szale September 27th, 2008 12:01PM

    Blog is super

  2. sandrar September 10th, 2009 12:38PM

    Hi! I was surfing and found your blog post… nice! I love your blog. 🙂 Cheers! Sandra. R.

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