Starting the free service is easy, but making it profitable is difficult. As I mentioned in previous article, starting free WordPress hosting, or starting free web proxy, does not need any fancy scripts and tools. But how many people do make meaningful profit?
Before you start to provide free web services, it is important to realize you have enough fund to pay your servers, your employees (if any) and yourself. Usually, it may take at least 3-6 months for you to get substantial revenues from your free hosting services; so be prepared for the hard time for the first a few months.
To generate generate revenue from your free hosting services, you have several options:
1. Sell you own ad space directly.
This could be very difficult for beginners as you do not have enough traffic. The advantage of this option is that you have full control of ads to be shown on your sites and you can set your price based on CPM (cost per 1000 impressions) or CPC (cost per click). The main disadvantage is that it is hard to sell!
You need install some software to track your ad campaigns. OpenX(formally PhpAdsNew) is an excellent ad server package. It is free, powerful and well documented. The shortcoming is that you may spend some time to integrate it with a shopping cart. You only need the open source version unless you have lot cash to burn.
2. Earn money through upgrading
This is more suitable when you have sizable user bases. You can provide more plugins, more templates, or more bandwidth, or more features, or ad -removal, as upgrades. If your service is good and stable, you should get about 1-2% upgraders.
3. Use 3-party ad services.
This is used by most providers nowadays. It is important to understand that the quality of these services varies largely and you may have little control of the ads to be shown on your sites. Although some providers allow you to exclude certain ads; it is usually not very useful. You should also understand most providers pay you on net-30 or net-60 days; it means you have to wait 30-60 days to receive your payment.
Here I give you some examples that suitable for free hosting providers.
- Google Adsense. Google is the leader of online ad industry currently. If you have a lot of Asian or middle east traffic, this may be the best for you, because affiliate ads generally do not work. Google pays you on net-30, monthly. (with minimum $100, if your account has less than $100, your balance will be rolled to next month). But keep in mind that, you can only put Google adsense ads on your own pages, because the pages created by your users is NOT considered as your contents. If you put the ads on such pages, your account will be very likely terminated or ads may be disabled on the whole domain. So, always remember this..
- Clicksor. Clicksor is a Google alternative. There are more ad formats than Google. The inline ad can earn better than Google Adsense. You can put the ads on all pages as long as your domain is approved. The CPM maybe not as good as Adsense if you have only Asian and African traffics. If you really have to generate revenue from such traffics, you can turn on pop-under and interstitial. I
- Adversal. Adversal is a reliable popup and pop-under ad provider. Now they also provide banner ads. The rate is quite reasonable.
Of course, there are some other ways to earn money from your free hosting services. I will discuss them (affiliate marketing ads, paid links, and paid posts) in a later article.