We started an amateur porn website last year November as a SEO project to see how to generate, drive and monetize adult traffic. Last week the website finally entered the 1.000.000 Alexa range and getting more to the top with steps of 40.000k every day. Going for a niche seems to be the right way. We did not use any payed ads or blackhat SEO to drive the website to the top. It's growing quiet organic. We just have a movie database containing 600 amateur movies and growing. The movies are being uploaded by our members. The design of the website is still very simple. The landing pages are focussed on pagespeed and Google SEO optimization. Also it is mobile friendly. The framework is designed from scratch (all coded by the team). A lot of work is being done to target the right blogs, news websites and social profiles. Not just to drop a link but write useful content and referring back to our website and it's own blog. This combination works quiet well. We even are opening a forum now, to allow our members to ask questions, help uploading content, discuss new features and talk about the published movies. With 500 members (35 active), 1500 unique visitors a day, bounce rate of 20%, around 14 pageviews a day and clearly seeing the videos are getting played, we think we are going into the right direction. And yes its all free.
Monetizing is still the biggest challenge. We just started to put a lot of effort in this subject. The biggest challenge is to keep it user friendly. I already get crazy of all those websites that try to push you to click something.... So we decided not to make the same mistake. We are now working with Adxpansion and Adfly. We don't show ads on the landing page. Most of our ads are on the page where the movie is being played. When a user is watching a lot of movies on a daily base, they will get the option to register or watch the movie with an advertisement. When choosing to watch it with an advertisement, we redirect them to an adfly fullpage ad. When the ad was presented, it redirects back to the play page and the visitor can watch some more movies without having to register. This process is failsafe proof and cannot be circumvented. I think this is a fair way of doing business.
It is still counting pennies at the moment. Around 16 EUR a month. Woewoe

If we can drive the website to 100.000 unique visitors a day it's will be around 1066,66 EUR a month

It all looks very promising because a 3 weeks ago we just had 100 unique visitors a day. We keep on monitoring Google's behaviour very closely and searching for further optimizations in the evening hours. Also we are looking into other search engines to analyze where we need to make changes. With the traffic we are having now, we can really recognize from which countries the traffic comes and what kind of visitors we are attracting. This analysis part makes it all quiet a lot of fun.