It’s important to understand how to use Google AdSense (or similar ad networks) and affiliate links effectively in order to make money blogging. But which advertising technique makes more money?

This article will show when to use Google AdSense ads, and when to use affiliate links to maximize your blog’s ROI (Return on Investment).

Before we compare and contrast each method of advertising, it is important to note that neither will work without high quality content to drive targeted traffic.

High quality content is what drives engaged visitors in sufficient numbers to make blogging, as a business activity, worthwhile financially. If you still need to focus on how to create high quality blog content and drive traffic, read the following articles before continuing:

How to choose the best advertising technique

The type of content on your blog plays a pivotal role in which type of advertising is more effective. Successful advertising requires relevant, or targeted, ads shown to as many people as possible.

The relevance of an ad is determined by the subject matter of the content on a webpage.

Focused content and good SEO mean that search engines will send traffic based on the search keywords used.

Only people who are predisposed to reading your content find it in the first place, via search. That’s why implementing killer SEO is so important.

If your advertising strategy is properly implemented, then people reading your content are predisposed to clicking on ads or affiliate links because they offer products and services they are already interested in, generating revenue in the process.

Google AdSense ads

Google AdSense is an ad serving network that allows you to create custom ads and ad channels, and display text, image or rich ads using embeddable code snippets.

AdSense ads are easy to customize and configure so that they integrate seamlessly into your blog. However, there are limits to this configuration. For example, it is not possible to select custom ad sizes.

Google’s embedded ad code snippets analyze the content of the pages they are in, as well as the demographics of the visitors, and select the best ads to display from their vast, global stable of advertisers.

Advantages of Google AdSense:

  • Contextually aware
  • Geographically targeted
  • Easy-to-implement
  • Displays international ads
  • High CPC (Cost Per Click)
  • Large network of advertisers

All of the above points make Google AdSense a great option for anyone looking for low maintenance, targeted ads.

However, Google AdSense may not be the best option for everyone.

Disadvantages of Google AdSense:

AdSense doesn’t always get the contextually aware part entirely correct. For example, a blog on African wildlife and conservation may result in Google displaying ads for hunting safaris – obviously not appropriate for people who care about animals.

It is possible to block ads by various criteria, but it can be difficult to do this ahead of time (i.e. you may only find out about an offending ad once it is already displaying on your blog).

Also, while AdSense has a huge network of advertisers, it may be that it struggles to find the right advertisers in your particular niche. In which case, it may show more generic, less effective ads, and revenue will drop.

It’s also not possible to control pricing. A highly focused blog may not generate large volumes of traffic, so it becomes important to have a high CPC (Cost Per Click). This can be difficult to achieve with AdSense.

Affiliate marketing

Many online retailers and other businesses offer affiliate partnerships to help market their products and services. In return, affiliates receive a share in the profits.

Be warned that affiliate marketing is likely to undergo some big changes in the latter half of 2012 as a result of Google’s announcement that it will display paid product search results above organic search results.

Read the following articles to find out how this might affect your affiliate marketing strategies:

The most successful of all affiliate programs is Amazon associates. But, there are also several large affiliate networks offering affiliate relationships with a wide range of businesses in a wide range of categories.

If you haven’t already, check out:

Adding affiliate links and ads to your content allows for fine-grained control, but it comes at a price…

Advantages of affiliate marketing:

  • Manually targeted
  • Easy to use
  • Control over which ads and links display
  • Ability to select ads based on payout
  • Ability to select advertisers based on performance

In effect, affiliate ads give you complete control – you can decide which product or service to show at a particular point in, on, or around your content.

Disadvantages of affiliate marketing:

The primary disadvantage of affiliate links is that payout is not determined by clicks. While Google ads pay you whenever someone clicks on the ad, a click on an affiliate link has to result in a defined conversion before payment is made.

Visitors who click on an affiliate link may decide not to purchase the product or service displayed on the target page. In which case, not only is there no revenue, but the visitor has also left your site (most likely never to return).

While payouts can be very high for a conversion (in some cases, thousands of dollars), the conversion rate may be very low.

Affiliate links may also not be appropriate for international visitors. For example, a business may only serve customers in the U.S, in which case, the affiliate ad is effectively wasted space for anyone outside the U.S.

Which advertising method makes more money?

The answer depends on the type of content, and the audience.

While affiliate marketing has many disadvantages, its main advantage is that it has a relatively high payout per action. If you are able to focus your content and reach the audience you intend, then affiliate links are an ideal advertising method because it is likely that you will achieve a fairly high EPC (Earning Per 100 Clicks).

If your audience is less defined and more dispersed, then AdSense offers great advantages in terms of providing nicely targeted ads without requiring effort on your part.

In general, I use Google AdSense to bring in my baseline ad earnings – earnings that tick over nicely on a daily basis. I use affiliate links when I know precisely who the visitor is, and what they are looking for.

I hope this article has helped clarify which advertising technique, or combination of advertising techniques is right for your blog.

How do you use advertising to make money blogging? Are you selling your own ad space? Which advertising technique is the most effective on your blog, and why do you think this is the case? Share your advertising experiences in the comments or join the conversation on Twitter and LinkedIn.