Health and Fitness Advertising Model

"I plan on a launching a targeted niche website in the health and fitness market. The bulk of my revenue will come from listings of local classes across Canada and for classified advertising. Later, I plan to sell merchandise. I also plan to grow the site with quality content. To obtain at launch a substantial listing of classes for visitors to see, is it wise to provide a free listing to potential advertisers for 3 months with a provision that renewals on the 4th month will be a specific price?" -- Rhonda Snith

To build an online business these days dependent upon advertising income is "iffy," since Internet advertising is still just coming out of its slump and ad prices may be low.

You're right. A directory of health and fitness classes would need to start with free listings. But instead of removing listings of those who don't pay after three months, you might instead want to sell enhanced listings -- bold face, color, more space, etc. Otherwise your directory won't remain very complete and won't be considered by visitors as a must-see directory. You'll need to update the directory to list current class schedules. Selling ads to small businesses is tough. It requires individual, one-on-one selling during which you'll need to convince each advertiser that his listing in your directory will bring him more than enough business to justify the cost of the ad.

Let's examine the revenue that might be generated if you built a focused content site with Google AdSense ads on every page. PPC prices for the keywords "Tai Chi," "Chi Gong," and "mind body" seem to be in the range of 17¢ to 34¢ per click, while "protein supplement" is 46¢ to 50¢. Let's assume that as a publisher you were to receive 30% to 50% of the PPC rate and get an average click-through rate of 1.5% (that is, an overall 1.5% CTR per webpage on any of the four ads that appear your site). At that rate, 100,000 page views per month would generate 1,500 click-throughs, each earning you somewhere between 5¢ and 25¢ -- a total of $77 to $375 per month. If your site attracts ads that have keywords getting $2 or $5 per click, of course, your income rises dramatically. It looks like you'd need to generate a whole lot of traffic to earn much money with Google AdSense on your proposed site.