3 ms·

It's considered "HIP" to say that at the moment. That doesn't make it right though. In the same way it's hip to hate Java right now. That doesn't mean that Java

by axod 18y ago

It's considered "HIP" to say that at the moment. That doesn't make it right though. In the same way it's hip to hate Java right now. That doesn't mean that Java isn't good at solving a set of problems in a good way - it clearly is. There's millions to be made from advertising revenue. If you can get people to pay for something, great, but not every product is the type where paying would make any sense at all. By charging consumers directly, you massively reduce your audience to a small subset of users. It's quite funny to see people imply that advertising revenue isn't "real" revenue, or is in some way less valuable than getting customers to pay directly. You know what the most powerful marketing word in the world is? "FREE". The clever thing is using that to your advantage and still making money. Tons of industries do that though, loss leaders work, 'free cellphone (with contract) works' etc etc.

adamhowell 18y ago
> It's quite funny to see people imply that advertising revenue isn't "real" revenue, or is in some way less valuable than getting customers to pay directly. As long as numbers like these hold true: "At the $1 RPM (CPM/CPA/CPC) level achieved by most general sites, you need 4 billion page views/month ... to [reach] $50M in revenue per year" (http://www.thealarmclock.com/mt/archives/2007/03/a_vcs_view_of_o.html http://www.thealarmclock.com/mt/archives/2007/03/a_vcs_view_...), charging money for a product that creates value is going to be a more viable way of starting a successful company online
- markessien 18y ago
  Don't be short sighted. Advertising on the web can be highly targeted and very effective. It's also measurable. Advertising on TV is dying, in papers, it's dying too. Ads on the web are the future, and though it may not seem like an excellent way for now, it's not going to get worse in the future. Compare 5 years ago to now. More companies can survive on ads than 5 years ago.
  - trapper 18y ago
    It wouldn't take much to put a big stop to that. Imagine if adblock came installed by default in 3.2!
    - jskopek 18y ago
      That an unlikely scenario. Pop-up ad blockers became popular because they eliminated a genuinely obtrusive method of advertising. Current online advertising is a pretty good compromise of unobtrusive vs. self supportive. If a company like firefox implemented ad blocking by default, they'd be doing the web a huge favor. Unlike pop-up blocking, firefox would be killing the only revenue sources for the majority of today's popular websites. Sure, it's easy to say that more companies should focus on getting 'real' business models, but a web in which _every_ professional web site required a subscription fee would be totally impractical. It will be very cool, however, to see how the micropayments industry challenges advertising. While it's unlikely CNN will every jump on it, what if some of the more adventurous sites ditched advertising in favor of a donation box model?
      - trapper 18y ago
        I agree it's unlikely, especially as that would likely kill firefox's revenue stream. I have often thought that a plugin like trackmenot that clicks random ads would be another thing that could destroy advertising. The thing is, people thought ad-skipping technology was unlikely until tivo came out and made it usable. I don't imagine it will be too long before someone comes out and does this, and if they execute well, it would be devastating to the industry.
        axod 18y ago
        sigh no it wouldn't. AdBlock blocks some adverts. It's useless blocking a large amount of adverts. If it comes installed, adverts will all just change and it'll be rendered useless. You can't draw parallels with TiVo. Video adverts prevent you getting to see the content you want. You have to wait. Internet advertising does not do this. It's just additional information.
- axod 18y ago
  How many paying customers do you need to get to $50M in revenue? Lets say you create some webapp that you charge $20/mo for. To get to $50M a year, you need to get 200,000 paying customers. The question then is what is harder to achieve, 200k paying customers, or 4bn page views/month.
  - rokhayakebe 18y ago
    Which one is more likely to get you "ramen" profitable, then allow you to figure how to get to 50M? -$20/mo.
    - axod 18y ago
      It depends entirely on who you're trying to sell to. If you're selling to businesses, then it's an easier job getting them to pay you directly. Personally though in my experience of consumer based websites, making money from advertising is 'easy'. Orders of magnitude easier than getting someone to reach for their wallet.
- pg 18y ago
  The value of traffic rises very sharply when it becomes more targeted though. The value of traffic on http://bountii.com http://bountii.com is worth orders of magnitude more than on a random Facebook page, because it's all people who are just about to buy something.
  - adamhowell 18y ago
    But targeted content and user generated content are two different things. Digg's Gaming category is more targeted than a random Facebook page, but that still doesn't mean a company wants to attach their brand to any random topic a user might come up with (something like, say, "[advertised game on this page] sucks"). Getting big and targeted is a lot more expensive (and highly competitive, see gadgets, etc.) than getting big and general, since it usually means non-user generated content.
rokhayakebe 18y ago
Ad revenue is real revenue. A dollar is a dollar whether it comes from a user or an advertiser. That being said, for every (EDIT:ok, most) struggling consumer startup you show me, I can show you a way they can apply their technology in different fields and charge customers. We just have to stop being afraid to say "Pay Me Please".
- axod 18y ago
  Right, but I think for that to happen widely, there needs to be a better payment system for the web. ISPs should have micropayment systems that add charges to your bill - just like when you SMS a shortcode, it gets added to your cellphone bill. This would massively change things on the web. At the moment though, the hurdle is just way too high for consumers. The effort required to get someone to pay you $10 isn't even in the same ballpark as the effort required to make $10 from advertising.
  - rokhayakebe 18y ago
    See my question here http://news.ycombinator.com/item?id=482551 http://news.ycombinator.com/item?id=482551.

by axod 18y ago

adamhowell 18y ago

> It's quite funny to see people imply that advertising revenue isn't "real" revenue, or is in some way less valuable than getting customers to pay directly. As long as numbers like these hold true: "At the $1 RPM (CPM/CPA/CPC) level achieved by most general sites, you need 4 billion page views/month ... to [reach] $50M in revenue per year" (http://www.thealarmclock.com/mt/archives/2007/03/a_vcs_view_of_o.html http://www.thealarmclock.com/mt/archives/2007/03/a_vcs_view_...), charging money for a product that creates value is going to be a more viable way of starting a successful company online

markessien 18y ago
Don't be short sighted. Advertising on the web can be highly targeted and very effective. It's also measurable. Advertising on TV is dying, in papers, it's dying too. Ads on the web are the future, and though it may not seem like an excellent way for now, it's not going to get worse in the future. Compare 5 years ago to now. More companies can survive on ads than 5 years ago.
- trapper 18y ago
  It wouldn't take much to put a big stop to that. Imagine if adblock came installed by default in 3.2!
  - jskopek 18y ago
    That an unlikely scenario. Pop-up ad blockers became popular because they eliminated a genuinely obtrusive method of advertising. Current online advertising is a pretty good compromise of unobtrusive vs. self supportive. If a company like firefox implemented ad blocking by default, they'd be doing the web a huge favor. Unlike pop-up blocking, firefox would be killing the only revenue sources for the majority of today's popular websites. Sure, it's easy to say that more companies should focus on getting 'real' business models, but a web in which _every_ professional web site required a subscription fee would be totally impractical. It will be very cool, however, to see how the micropayments industry challenges advertising. While it's unlikely CNN will every jump on it, what if some of the more adventurous sites ditched advertising in favor of a donation box model?
    - trapper 18y ago
      I agree it's unlikely, especially as that would likely kill firefox's revenue stream. I have often thought that a plugin like trackmenot that clicks random ads would be another thing that could destroy advertising. The thing is, people thought ad-skipping technology was unlikely until tivo came out and made it usable. I don't imagine it will be too long before someone comes out and does this, and if they execute well, it would be devastating to the industry.
      - axod 18y ago
        sigh no it wouldn't. AdBlock blocks some adverts. It's useless blocking a large amount of adverts. If it comes installed, adverts will all just change and it'll be rendered useless. You can't draw parallels with TiVo. Video adverts prevent you getting to see the content you want. You have to wait. Internet advertising does not do this. It's just additional information.
axod 18y ago
How many paying customers do you need to get to $50M in revenue? Lets say you create some webapp that you charge $20/mo for. To get to $50M a year, you need to get 200,000 paying customers. The question then is what is harder to achieve, 200k paying customers, or 4bn page views/month.
- rokhayakebe 18y ago
  Which one is more likely to get you "ramen" profitable, then allow you to figure how to get to 50M? -$20/mo.
  - axod 18y ago
    It depends entirely on who you're trying to sell to. If you're selling to businesses, then it's an easier job getting them to pay you directly. Personally though in my experience of consumer based websites, making money from advertising is 'easy'. Orders of magnitude easier than getting someone to reach for their wallet.
pg 18y ago
The value of traffic rises very sharply when it becomes more targeted though. The value of traffic on http://bountii.com http://bountii.com is worth orders of magnitude more than on a random Facebook page, because it's all people who are just about to buy something.
- adamhowell 18y ago
  But targeted content and user generated content are two different things. Digg's Gaming category is more targeted than a random Facebook page, but that still doesn't mean a company wants to attach their brand to any random topic a user might come up with (something like, say, "[advertised game on this page] sucks"). Getting big and targeted is a lot more expensive (and highly competitive, see gadgets, etc.) than getting big and general, since it usually means non-user generated content.

rokhayakebe 18y ago

Ad revenue is real revenue. A dollar is a dollar whether it comes from a user or an advertiser. That being said, for every (EDIT:ok, most) struggling consumer startup you show me, I can show you a way they can apply their technology in different fields and charge customers. We just have to stop being afraid to say "Pay Me Please".

axod 18y ago
Right, but I think for that to happen widely, there needs to be a better payment system for the web. ISPs should have micropayment systems that add charges to your bill - just like when you SMS a shortcode, it gets added to your cellphone bill. This would massively change things on the web. At the moment though, the hurdle is just way too high for consumers. The effort required to get someone to pay you $10 isn't even in the same ballpark as the effort required to make $10 from advertising.
- rokhayakebe 18y ago
  See my question here http://news.ycombinator.com/item?id=482551 http://news.ycombinator.com/item?id=482551.