Why 80% of websites do not monetize?

The article didn't come close to giving a complete picture, and your summarization of their findings are even less accurate.

The article didn't say that only 20% of the websites surveyed are monetized. They (essentially) said that 1) 20% of the websites they tested 2) display ads from the advertising networks that they track.

There are many more ways to monetize a site, than to pay an advertising network for exposure.

100 Million websites monitored is probably a decent sample size, but the advertising networks probably fall far short of the actual amount of advertising placed on the web. Even if those were the ONLY advertising networks available most web sites DO NOT make their money from running paid ads

Point of note... isn't it odd that the "80/20 rule" fits this scenario so well?

Since only 20% of the web sites use those particular advertising networks, let's think a little about what the other 80% might be doing.

BTW, I didn't notice Facebook mentioned on their list at all. Does that omission alone make you wonder about drawing any conclusions from their data with regard to "monetization" via paid advertisement placement?

First, realize that the web itself is considered to be an advertising medium. Small local businesses are happy to divert some portion of their offline advertising budget to the creation of a website. That doesn't mean that they would be willing to divert more of those monies to the distribution of ads.

Just the existence of a web site is considered to be an advertising expense. If that small business has optimized for mobile, and/or established a Google Places presence, put Google Maps on their website to direct local traffic, publishes their address, their hours of operation, the phone number for local residents to make a reservation, published their menu online, etc. It's monetized.

Think about how many businesses in your town have a website (even what YOU might consider to be an information only site). Does it further expose their brand? Does the site provide a service (even an informational one) to the local community? ...more branding

Even before the web, small business was much more likely to pay for a Yellow Pages listing than to employ the services of an advertising agency to create and distribute ads for them. Today they have just replaced the Yellow Pages listing with an online web site.

Twenty years ago, there was no facility to accept credit card payments online, and 40 years ago, only the larger, well established businesses could even accept credit cards at all. Today small businesses (including many sole proprietorships) have their own merchant accounts and accept payment for services/product online... or maybe they just use Paypal for accepting online/offline payments. They are monetized.

They may not be using an advertising network - but they are still monetized.

I've gotten a lot wordier than intended, but I hope you get the point.

Not using an advertising network is not the same thing as not monetized.