Top Passive Income Online Business Models & How They Work [Part 3] • Income Prodigy

Did you know that you can earn passive income from selling or displaying advertising on your blog, podcast, YouTube channel or social media page?

That’s what I talk about in episode 6 of the OBFM podcast which is solely dedicated to Advertising: How to Generate Passive Income from Selling Advertising on Your Online Property.

This is the third session of our five-part series on the top passive income types of online business.

As a recap in Episode 4 (part 1 of this series) about the two approaches that you can follow to pursue the various types of passive income online businesses.

In Episode 5 (part 2 of this series) I focused on the most popular passive income generating model there is: Affiliate Marketing.

Back to Episode 6 here, here’s what you’ll learn from it:

What You’ll Learn

Everything about Google AdSense: what it is, how it works, how much you can make, pros & cons and my good and bad experiences with it.
YouTube Partner Program: how to monetize your YouTube videos, my recording studio experiment and alternatives to YouTube’s monetization program.
Selling direct advertising space: on your blog, website, podcast, video channel and social media page.
And much, much more.

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Links and Resources Mentioned

Affiliate Disclaimer: Some of the following links below may be affiliate ones, which means I earn a commission — at no extra cost to you — if you end up purchasing anything after clicking through those links.

Transcription

Hey everybody!
Welcome to the 6th episode of the OBFM podcast!

My name is Louie and I’m so glad to have you here today listening to the show!

I have good and bad news for you. Which do you want to know first?
Well, the good and the bad are… the same.

Announcement

Please, don’t get mad at me. I did tell you last week that this would be the concluding episode of our series where we talk about the top online business models that can generate passive income for you but…. it is not.

I got a little carried away, as I use to when I blog, and the episode’s content just continued to get longer, longer and longer until I couldn’t fit it in just one episode. Meaning that instead of the concluding part this is, just, the third part of this series.

Sorry about that. I’m still leaning my away around this podcasting world.

Previously on Online Business FM

As a recap… (in your mind, you should hear a voice saying “previously on Online Business FM”)… anyway, just kidding… as I was saying…

As a recap, in the first part of this series (Episode 4) I talked about the two approaches that you can follow to pursue the various types of passive income online businesses.

And those approaches are: approach 1) with your platform and/or your own audience and approach 2) without a platform or an existing audience of your own.

In the second part (Episode 5) I focused on the most popular passive income generating model: Affiliate Marketing.

I told you what affiliate marketing is, how it works, who is it for, how to do it the right way and shared my 3+1 affiliate marketing rules.

If you’d like, you can always go back and listen to those two episodes (or any of the already published ones for that matter).

You just need to point your browser to onlinebusiness dot fm slash the number of the session you’d like to listen to, onlinebusiness.fm/4, onlinebusiness.fm/5… or, I don’t know, slash 500 if you’re in a long-distance future listening to an old, old episode.

Or you can simply scroll down through the list of episodes on iTunes or on your favorite podcasting directory.

Let’s Get the Show Started

In today’s episode, we’re going to be focusing on another type of passive income model I’d like to address in this series:
Advertising.

Okay, without further ado… Let’s rock and roll, baby!

Advertisting

Advertising… what can I tell you about advertising?

Oh boy, I surely have a lot to talk about concerning advertising. You’ll know why in just a moment.

Google AdSense

One of the ways to using advertising to monetize your blog or website is through Google AdSense.

Google AdSense is probably the simplest and easiest way to earn passive income there is.

And best of all?

It comes with almost no costs whatsoever to get started and as you go along your journey.

But, what is Google AdSense? And how can you make money from it?

Well…

Google AdSense are those advertisements (in the form of videos, images or text) you see on tons of websites and blogs, on YouTube before or during the videos, and at the top or on the right of Google’s search results pages.

You, as a site owner or publisher, sign up to Google’s AdSense program to monetize your website’s content by displaying ads there.

Whenever one of your visitors clicks one of those ads, you get a small percentage of what advertisers are paying Google to run those ads on their advertising platform.

Advertisers, on the other end of this particular advertising spectrum, use Google AdWords to create those ads that’ll be run on the Google AdSense platform.

How Does Google AdSense Work?

Let’s quickly learn how it all works:

You build a website, publish content there and drive traffic to it.
You then sign up to Google AdSense, add their advertising code into the HTML source of the pages on your website where you want the ads to appear.
And every time one of your visitors clicks on one of those Google AdSense ads, you’ll make a little bit of money.

It’s as simple as that. The higher traffic you can get, the higher the income potential.

Google AdSense Pros

And… what “Pros” come with using Google AdSense?

First of all, it’s quick and easy to set up.
Second, you can make a considerable amount of money per month, if you have enough traffic. (Say you have thousands of visitors every day, you can make 15, 30, 50 or even more dollars per day. Now, multiply that by 30 days and you’ll get a nice sum of money. If, however, you manage to get even more than a just few thousand visitors… well, just imagine how much you could potentially make.)
Third pro: You don’t have to sell or promote anything. You just need to place the ads there and focus on creating great content that attracts lots of traffic.
Another advantage: You can use Google AdSense to monetize an already existing website or blog, or those pages on your affiliate website that don’t have any affiliate links in them. (Although, I would advise you to leave a good percentage of your informational posts on your affiliate website with no affiliate links and no advertisements of any kind. In my eyes, Google doesn’t enjoy seeing every page of a website created with the purpose of making money.)

Google AdSense Cons

So… how about some “cons”, some disadvantages to monetizing with Google AdSense?

Ads of any kind can ruin your user experience and be annoying.
Your visitors might have ad blocker software installed so they won’t even see the ads let alone click on them. Meaning, no money being made for you.
Your visitors might also have learned to look the other way and simply ignore advertisements like these.
One of the most important disadvantages: You’re redirecting people to someone else’s website instead of keeping them on your own.
If you’re selling your own stuff or promoting products as an affiliate, displaying ads from the competition or any other kind of ads won’t help with your sales. That’s why I recommend not placing ads on pages where you’re promoting affiliate products or have affiliate links in them. Keep them separated: Page A is monetized with Affiliate Marketing; Page B is monetized with Google AdSense.
If you don’t follow Google AdSense rules and terms by the book, you can get banned from the platform — some or most of the times for life — and lose your income stream all of a sudden with no chance of appealing and getting your account reinstated.

My Google AdSense Shipwreck Story

Now, if you would ask me:
«Dear Louie, do you like Google AdSense?»

First, I would tell you… “I like the ‘dear’ part, you’re sweet.”

And second, I would probably shock you by replying…
“No, I do not like Google AdSense.”

Why?

Because, like I’ve told you in Episode 1, I ran a viral-videos website for around 5 years only to see its main income stream vanish into thin air overnight when I least expected.

That income stream was precisely Google AdSense.

I got my domain name banned from their platform for, allegedly, having duplicate and/or thin content on my website.

That terrible morning, when I read the email stating I had been banned, I almost fell off my chair. I instantly froze and felt like a hole had been opened beneath my feet and I was falling down into the darkness.

“What did I do wrong?!… Is this some kind of mistake…? Am I reading this right…? Will they let me fix it to get my account reinstated? Can I get unbanned at all?”

No answers from big G, just a deafening silence.

Lessons Learned from Running a Failed Viral News Site

The end result was that I was forced to start over, but this failure taught me several lessons.

One of which is:

Don’t put all of your eggs in the same basket when it comes to income streams.
Do not depend on just one like I did.

Even if you follow the rules of any type of income stream that’s not entirely under your control, you can get banned, kicked, fired, suspended, throw out the door… without notice.

I mean, it’s up to them to judge whether you’re strictly obeying by the rules or not. They are the ones making the rules and the judges of their own causes.

My duplicate content were mere three posts that featured movie trailer videos where I quoted one paragraph… ONE paragraph of the synopsis of those movies.

My thin content were all the other posts (over 5 thousand of them) where I featured viral videos — that was the purpose of the website, after all, to show the most-watched videos — and such type of content (videos) apparently doesn’t or didn’t count as “real” content.

Do I Recommend Google AdSense?

Well, it’s a type of… income stream, nonetheless.

I still use it on some of my other websites. And you can make good money from it.

My earnings ratio back then averaged $1 USD per 1 thousand visitors. I made 75€ (around $80 at the time, more or less) on my record day.

So, yes, depending on the circumstances, type of website you have, your niche or audience and whether or not those AdSense ads being displayed help your audience, if you promote affiliate products or not, sell your own stuff or not… Google AdSense can be a good opportunity.

You need to take an honest look at everything I’ve just mentioned and consider if placing ads there is appropriate for you or not, if it makes any sense.

If you are not sure, you can always run experiments and see what you get.

That’s one of the most important lessons with everything related to online business or business in general:
Test, try new angles.

Study what happens when you change things around and take it from there.
Improving should ALWAYS be one of your priorities.

YouTube Partner Program

There’s another advertising platform related to Google AdSense that I’d like to talk about. Actually, it used to be part of Google AdSense.

It has now moved away from it and became the YouTube Partner Program; which is nothing more than just a cool name for a way to monetize your YouTube videos with ads from the Google AdWords platform.

Think of it like the Google AdSense program for your YouTube channel.

How Does the YouTube Partner Program Work?

Here’s how it works:

You set up a YouTube channel.
Publish videos.
Try and build a following there.
And when you reach the minimum eligibility requirements for the YouTube Partner Program (which, since January of 2018, are… 4,000 watch hours in the previous 12 months and 1,000 subscribers). When you reach those requirements, your channel will be reviewed to join the program. Or, if you feel they are taking too much time, you can simply apply to join the program from your account’s Creator Studio.

YouTube says that these new monetization rules are meant to protect their ecosystem from spammers and reward those who add value to their platform.

My YouTube Recording Studio Story

These new eligibility requirements might seem hard to reach and I’m not saying they aren’t, but let me give you an example for you to better gauge how hard it is.

Back in 2014, while I was still running my viral-videos website, I decided to create a YouTube channel for the project. I thought it was about time to take it to next level and start producing our own viral content.

So… we built our own recording studio.

We got a few microphones, some headphones, an audio mixer, a lighting kit, we even bought one of those green screens for the background that you can then change when you’re editing your videos and we borrowed a video camera and video production services from a friend of us, who is a wedding and event photographer and videographer.

A few singers were selected to record cover versions of the most popular songs and BAM!, we were ready to shoot for the sky and become famous and rich.

The expectations, as you can imagine, were high and rightfully so… but, due to several constraints and some mistakes, we only ended up publishing FOUR cover-song videos plus a few unrelated more.

That being said, my channel had 14 videos total by the end of 2014.

Now here’s the most important thing:

From January 1st to December 31st of that year, those 14 videos accounted for 550 watch hours.
I never published another video on that channel and, as we speak, I have a mere 75 subscribers in total.

As you can tell, even with so few videos published, I and my team reached almost 14% of the minimum watch hours required in a 12-month period.

However, we were not so close when it comes to the required number of subscribers (one thousand) but that’s not bound to any specific length of time. You can build your following on YouTube as you go along.

All of this to say… it looks difficult and it surely isn’t super easy but, with a little bit of work and consistent video production and publishing, it can be done.

Other Ways to Earn an Income from Advertising

Besides Google AdSense there are several other similar advertising platforms that work more or less like it.

I could name a few of them but, to tell you the truth, most of the ones I tried when I was desperately trying to find an alternative to Google AdSense after being banned were disappointing.

Some, even, are totally not recommended because they are intrusive, annoying and completely disrupt user experience and accessibility on your website.

So how else can you make money from advertising?

Direct Advertising Space on Your Online Property

You can sell direct advertising space on your website, podcast or YouTube channel.

There are two ways to go about doing this. Such ways can work together or independently from each other.

Your Advertising Media Kit

The first way is to set up a page on your site where you show your website’s, podcast’s or YouTube channel’s stats.

That’s one of the reasons why you should always have a website as your home base regardless of whatever medium you prefer: audio in the case of a podcast, video in the case of YouTube or other video sharing platform and text in the case of a blog or website… but here you already have a website unless you’re blogging on a blogging platform that’s not really yours like Medium.com, for example.

Your stats should include the amount of traffic you get and detailed demographic information about your audience.

(Add Google Analytics to your website to get this kind of information.

As for a podcast or a video channel, those mediums generally have similar statistical tools integrated on the hosting platforms you’re already using.)

Alongside your stats, you should enumerate the advertising spaces available on your website, podcast or video channel, how much would they cost, for how long the rental period would be and how people can reach out to you to discuss payment terms.

These advertising spaces can be in the form of banner ads, product mentions on your videos, ads on your podcast, etc. You can be creative here and you’ll probably get some suggestions from the advertisers themselves.

Just don’t forget to keep your user experience unharmed.

The aim of this kind page — which is known as advertising media kit — is to convince potential advertisers that you (through your blog, podcast or video channel) are a great bet for them to get in front of their target audience. Set up your own media kit to show your stats and available advertising offers.

Reaching Out to Advertisers Directly

The second one of these two ways to sell advertising space is to reach out to advertisers directly (yourself or by hiring someone specialized in those skills) to try and reach an agreement or some sort of deal that can benefit both parts.

If there are any particular brands you like, use or recommend and you think those brands, companies or products can genuinely help your audience, reach out to them directly, show them your stats and convince them to advertise on your online property.

I’m not saying to try and talk to the CEO but try and get in touch with someone from the marketing department.

Regardless of the way for which you choose, at the bare minimum you should have a “Contacts” page where people can learn how to reach out to you so they can offer to advertise.

Why is this important?

Because there are still tons of other ways to earn money from Advertising.

Social Media Sponsored Content

Still in the realm of sponsored content, if you have a large following on social media, you can make money from publishing stuff that has some kind of advertisement behind it.

This time, however, instead of on your website or blog, it’ll be on Facebook, Twitter, Instagram, or some other social network channel of yours.

And instead of some promotional text or a link to the advertiser’s website, you’ll just have to share their articles, mention or recommend their products.

YouTube or Video Channel

You can also do that on your YouTube videos for example.

Depending on how big you are on YouTube, you can make money by mentioning a brand, recommending something or simply just showing a brand name or using a product on your videos.

Even just wearing a shirt with a brand name on it can put money in your bank account.

Or, like I told you earlier, as long as you meet the requirements, you can join the YouTube Partner Program and monetize your videos.

Just like YouTube, there are other video sharing platforms where you can monetize your videos with their advertising program. Dailymotion is a good example and my videos there have also generated passive income money for me.

Podcast

If you happen to have a podcast, there are some advertising avenues for you to earn an income with it, as well.

The more listeners or podcast subscribers you have and, therefore, the higher your podcast download numbers are, the greater the chances of having some advertisers interested or even securing a sponsor spot for your show.

The number of downloads your podcast episodes manage to get relate to the industry favorite when it comes to pricing models for podcast advertising…

CPM or Cost per One Thousand: For every thousand downloads an episode containing an ad has, you’ll earn a pre-determined amount of money.

There are other pricing models, like CPA (Cost per Acquisition), where the price is defined as the cost to acquire a new customer.

Each time your podcast makes the advertised business get a new customer you, as the podcast host or producer, will be payed a set fee.

You can also negotiate a pricing model that’s better or more suited to everyone’s needs. You and your advertiser just need to sit down and reach an agreement that makes everybody happy.

Podcast Ad Slots

As for which type of ads — or ad slots in the podcasting sphere — are concerned, you or the advertiser can opt for pre-roll, mid-roll or outro-roll.

As each name implies, the first are played at the start, the second at the middle and the last at the end of the episode.

Podcast ads usually last from 15 to 60 seconds and they can be created in two ways: having the show’s host doing the ad him or herself or having someone else doing the advertisement.

Since this medium is more intimate, bringing the listener closer to the podcaster, it usually works best to have the show’s host doing the ad.

This kind of advertisement, like any kind of advertisements, needs to be aware of the show’s unique audience or niche and speak their language (as in “jargon” and specific terms this sort of community utilizes) to be as effective as it can possibly be.

Services like Midroll.com or even podcast hosting services like Libsyn.com, can help you get advertisers or sponsors to your show.

Solo Ads

The final type of advertising that can generate passive income for you, is lending your email list to someone else.

Wait, calm down now…

I’m not saying to destroy your subscribers’ trust in you and sell their email addresses to the occasional person so they can spam your subscribers.

No way!
I don’t like, recommend or would even consider doing that, not ever.

What I mean is using your email list to promote or advertise somebody else’s offer, event or webinar, for example.

As with the other advertising models already discussed, you might get offers from people interested in advertising to your list subscribers.

For example, you can promote some company’s webinar, where they explain how your specific audience can achieve their goals and how their product might be the best solution to help do that more easily or faster.

The way you make money depends on the kind of agreement you negotiate with the advertiser.

They can offer to pay you a certain amount up front, or they can pay you for the number of people that visit and perform certain actions on their website or per how many sales you drive to them, or per how many webinar attendees you send them or, even better, earn a certain amount up front and a commission from the sales they generate from the webinar.

If those commissions are on a recurring basis and depending on the number of subscribers you have, you can be looking at a very lucrative deal here.

Conclusion

There are more, for sure, but these are some of the types of advertising that can generate passive income for you.

If you’re just starting out, you obviously won’t have all of these opportunities at your disposal. So which one should you choose when it comes to advertising?

Which Model Is Right for You?

This is a tough question to answer, because not every type of advertising fits every type of business or medium mentioned in this episode.

If you have a blog, for example, the simplest and easiest option would be Google AdSense. (But, then again, you’d also need traffic to make any money.) If you have a podcast and a YouTube channel, things won’t look so easy at the start.

Focus on Adding Value First, Not Making Money

I guess the word here is “creativity”.

Focus first on creating great content, bringing value to the niche you’re in, helping and serving your audience the best way you can.

And then, yes, get out there and look for ways to earn an income from selling advertising on whatever online property you have, be it a blog or a website, a podcast or a video channel, or your social media channel.

Ask Yourself If It Makes Sense…

Nevertheless, let me go back and reiterate what I said earlier, because this needs to be properly emphasized, highlighted, bolded or underlined, if you will:

For any kind of advertising model you choose or advertiser that makes you an offer, you should always ask yourself if:

If makes sense to display or feature those ads.
If that company or brand aligns with your personal or brand’s values.
If those products will really help and serve your audience.
Whether or not you’re breaking your followers trust.
Whether or not you’re hurting your business.
Or, if you’re harming user experience or accessibility.

These are all important questions you really need to bear in mind, before closing an advertising deal and placing or displaying those ads.

Thanks for Listening

That concludes today’s episode! I hope you took a lot from it.

Show Notes Page

To get the show notes head on over to onlinebusiness.fm/6

See You Next Time

The Online Business FM podcast will be back next Thursday with the final type of passive income generating model: Selling your own products.

See you there! This is Louie Luc and I’m signing off. Bye-bye!

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