Eli5: how exactly does my clicking on a link to a website turn into money for the website’s owner?
In: Other
“Senator, we run ads” – Mark Zuckerberg
Websites that run ads are paid by the visit, and by the click. Depending on the contract a website will make fractions of a penny per visit, a tad more of the user actually clicks on the link.
To give you an idea what it costs to run an add using the Facebook ad service: *Facebook Ads CPM (Cost Per 1,000 views) – $14.9. Facebook Ads CPC (Cost Per Click) – $0.44. Facebook Ads CPI (Cost Per Install) – $1.97.* The hosting website in turn gets paid a tiny fraction of that.
Big internet companies like Google and Facebook are actually giant marketing engines. There ad platforms are a big part of how they make money and smaller websites can sign up for the Google and Facebook advertising services. FB + G take care of signing up advertisers and making ads, then they post ads on your site using their software that you integrate into you code. In exchange you get a cheque based on how many visits you get.
For website owners it’s a good deal because it’s passive income. Having that ad banner generates you revenue for no real effort and helps pay your website costs. The downside is you have limited say in what ads get posted.
Otherwise, unless your website is paid service (you are selling something) you don’t make money. The website actually costs you money to run.
Sites like Amazon and Ebay for example run their websites at a loss (cost of doing business) because they are selling products and make their money that way.
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