No, this is not the formula to turn lead into gold… then again maybe it is. There is a simple formula that everyone in internet marketing should know regarding how to monetize web traffic. Making money online all starts with web traffic. If you have any questions regarding how important web traffic is to your online business check out Myth #1 of our free ebook, “The eBay Myth”.

The traffic that you direct to your site is usually filtered through a “conversion piece” that exists on your website. This conversion piece could be “buy now” button on your site that allows them to purchase your own product or an affiliate product that you market. This product could be a physical product that gets shipped to your customer or it could be an electronic product such as an ebook that requires no physical shipping.

As an alternative to a physical or electronic product your chosen monetization channel might be ad-based. While there are many advertising networks as well as self managed web ads, Google AdSense is by far the most popular of the advertising networks. If you choose to go the ad-based route then a simple click on of your ads is a successful conversion.
                                                                                                                                                                   Whatever percentage of the targeted web traffic which lands on your site that actually buys, or clicks, whatever the case may be is the conversion rate.

In addition to the conversion rate it’s important to know how much we actually make each time we produce a successful conversion. This dollar amount is our value per-conversion. So now we are ready for our complete formula.
                                                                                                                                                                          Let’s say we wanted to calculate our gross revenue per-month. Gross revenue per-month is equal to web traffic per-month, times conversion rate, times value per conversion.