5 ms·

This post has a very naive understanding of online advertising. Here's a breakdown: - If you're thinking of advertising in terms of just slapping on some Googl

by ashray 14y ago

This post has a very naive understanding of online advertising. Here's a breakdown: - If you're thinking of advertising in terms of just slapping on some Google Adsense then you need high amounts (millions of users per month) of traffic to make reasonable money. - If you're thinking of specific kinds of targeted advertising, this can be very powerful depending on your niche. If you can hire a sales team to push advertising in those niches, you may be very successful, especially if you can show quality ROI to advertisers. eg. a cancer hospital advertising on a site with cancer related information. - If you're thinking of other kinds of advertising, business partnerships in terms of 'upsells' to a free product work really well too. The above is a gross generalization but claiming that 'advertising' is a broken business model is laughable. There are definitely certain use cases where online advertising can be your business model and of-course others where it would absolutely not work. The main downside of advertising supported business is that advertising can go in and out of demand, so you add an additional issue/unknown/risk in terms of product revenues. TLDR; most high traffic sites can make reasonable money from online advertising.

tzaman 14y ago
In my personal experience 90% of people with ideas think about advertising, when in reality, only 5% (I'm guesstimating) make serious money with it. Or maybe even less.
- ashray 14y ago
  You're right, and the problem here is a naive understanding of advertising as a business model rather than it not being a good business model. I happened to go the opposite way. My first major project was an online advertising success. I naively applied my 'learning' to my 2nd project. That obviously didn't pan out. That led me to a better understanding of business models and how and where they may work. So I guess it can go both ways. Most people are only familiar with 'big names' like techcrunch, lifehacker, facebook, etc. which are very much advertising supported platforms. That's probably why they think 'advertising' is the answer even if they're not building a high traffic web app.
- mistercow 14y ago
  What portion of the other 10% make serious money with non-advertising models?
  - tzaman 14y ago
    touche :)
phoboslab 14y ago
I have a site that has around 4-5m visits per month, yet all attempts to monetize it have failed. I'd love to use Amazon's referral program or Google Ads, but I can't because the site's content is somewhere between reddit and 4chan - deemed too shady for anything else than porn ads. So, the site still remains a hobby project - exactly as when I launched it 6 years ago.
- ashray 14y ago
  If it's a forum style thing then discussion systems with a high number of pageviews per unique visitor (vbulletin/reddit/etc) will generally have very poor advertising revenue. Maybe you need to look at a different model though ? Sort of like reddit gold, premium memberships, or some other services that may somehow add value to your site ? It's often surprising how many people are willing to pay $2-$10 per month for something! If you really mean 4-5m million visits (and not pageviews) I'd love to take a look and see if I can help you figure out some sort of solution. Send me an email (addrress is on my profile).
  - phoboslab 14y ago
    There's no email address on your profile :) The site is http://pr0gramm.com/ http://pr0gramm.com/ (NSFW) - mostly german visitors and yes, it's 4-5m visits, not pageviews. It's kinda impossible to define what a "pageview" is on that site anyway.
    - ashray 14y ago
      Whoops! Added in my email address :) Cool site btw, IRC still has some pretty weird stuff going around :P
    - gabemart 14y ago
      Have you considered partnering with a company that would play off the kind of irreverent content IRC carries? The company TshirtHell.com came to mind as (IIRC) they've fostered controversy in the past. You do something like every xth image on your site is the image from one of their Tees with a referral link to buy as the source. You could tweak x to find the right balance between annoying and profitable.
vidarh 14y ago
I think the reason that most people in this story laughed at it when advertising was brought up is simply because advertising is the "default" answer from people who have not thought one bit about how to monetize. And who, because of that, are not just answering "advertising", but are answering advertising without having a credible story of much about it in general as well as without having the faintest idea of what kind of model would be realistic to model their idea's income potential with advertising. So really, "advertising" was a proxy for "haven't got a clue".
jonascopenhagen 14y ago
"This post has a very naive understanding of online advertising" Not really. The post talks specifically about "just putting ads on", which means we're talking about something like AdSense and not the more lucrative options you mentioned which involve a sales team. The fact is, you'll need a really high amount of visitors to make any decent amount of money through AdSense - especially if you have several employees and investors who need to get their share. The post is right on the money. No doubt there are certain forms of advertising that are effective - but the point made by the post is that slapping AdSense on your startup's pages isn't going to cut it.
cdmorris 14y ago
> If you're thinking of advertising in terms of just slapping on some Google Adsense then you need high amounts (millions of users per month) of traffic to make reasonable money. Hmm, I wonder what you might define as "reasonable money." This seemed like an interesting take on this question to me: http://answers.onstartups.com/a/40484/23679 http://answers.onstartups.com/a/40484/23679

by ashray 14y ago

tzaman 14y ago

In my personal experience 90% of people with ideas think about advertising, when in reality, only 5% (I'm guesstimating) make serious money with it. Or maybe even less.

ashray 14y ago
You're right, and the problem here is a naive understanding of advertising as a business model rather than it not being a good business model. I happened to go the opposite way. My first major project was an online advertising success. I naively applied my 'learning' to my 2nd project. That obviously didn't pan out. That led me to a better understanding of business models and how and where they may work. So I guess it can go both ways. Most people are only familiar with 'big names' like techcrunch, lifehacker, facebook, etc. which are very much advertising supported platforms. That's probably why they think 'advertising' is the answer even if they're not building a high traffic web app.
mistercow 14y ago
What portion of the other 10% make serious money with non-advertising models?
- tzaman 14y ago
  touche :)

phoboslab 14y ago

I have a site that has around 4-5m visits per month, yet all attempts to monetize it have failed. I'd love to use Amazon's referral program or Google Ads, but I can't because the site's content is somewhere between reddit and 4chan - deemed too shady for anything else than porn ads. So, the site still remains a hobby project - exactly as when I launched it 6 years ago.

ashray 14y ago
If it's a forum style thing then discussion systems with a high number of pageviews per unique visitor (vbulletin/reddit/etc) will generally have very poor advertising revenue. Maybe you need to look at a different model though ? Sort of like reddit gold, premium memberships, or some other services that may somehow add value to your site ? It's often surprising how many people are willing to pay $2-$10 per month for something! If you really mean 4-5m million visits (and not pageviews) I'd love to take a look and see if I can help you figure out some sort of solution. Send me an email (addrress is on my profile).
- phoboslab 14y ago
  There's no email address on your profile :) The site is http://pr0gramm.com/ http://pr0gramm.com/ (NSFW) - mostly german visitors and yes, it's 4-5m visits, not pageviews. It's kinda impossible to define what a "pageview" is on that site anyway.
  - ashray 14y ago
    Whoops! Added in my email address :) Cool site btw, IRC still has some pretty weird stuff going around :P
  - gabemart 14y ago
    Have you considered partnering with a company that would play off the kind of irreverent content IRC carries? The company TshirtHell.com came to mind as (IIRC) they've fostered controversy in the past. You do something like every xth image on your site is the image from one of their Tees with a referral link to buy as the source. You could tweak x to find the right balance between annoying and profitable.

vidarh 14y ago

I think the reason that most people in this story laughed at it when advertising was brought up is simply because advertising is the "default" answer from people who have not thought one bit about how to monetize. And who, because of that, are not just answering "advertising", but are answering advertising without having a credible story of much about it in general as well as without having the faintest idea of what kind of model would be realistic to model their idea's income potential with advertising. So really, "advertising" was a proxy for "haven't got a clue".

jonascopenhagen 14y ago

"This post has a very naive understanding of online advertising" Not really. The post talks specifically about "just putting ads on", which means we're talking about something like AdSense and not the more lucrative options you mentioned which involve a sales team. The fact is, you'll need a really high amount of visitors to make any decent amount of money through AdSense - especially if you have several employees and investors who need to get their share. The post is right on the money. No doubt there are certain forms of advertising that are effective - but the point made by the post is that slapping AdSense on your startup's pages isn't going to cut it.

cdmorris 14y ago

> If you're thinking of advertising in terms of just slapping on some Google Adsense then you need high amounts (millions of users per month) of traffic to make reasonable money. Hmm, I wonder what you might define as "reasonable money." This seemed like an interesting take on this question to me: http://answers.onstartups.com/a/40484/23679 http://answers.onstartups.com/a/40484/23679