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Your belief that selling ads is not valid or useful to the user never ceases to amaze me. You sell a few online webapps, and get a full cut. People showing ads

by axod 17y ago

Your belief that selling ads is not valid or useful to the user never ceases to amaze me. You sell a few online webapps, and get a full cut. People showing ads, sell them tech, finance, cars, whatever. Anything that's relevant, and get a smaller cut. A smaller cut of a massive pie is often better than a full cut of a very small pie. The website selling directly has a finite (small) number of things they can sell the user. 37signals can sell me a basecamp subscription, a campfire subscription... The website advertising to the user has a massive inventory they can get the user to buy. Each time the user comes back, there's another chance to sell something new to them. I'm guessing either you tried advertising at some point and couldn't get it to work for you, or you just hold some sort of weird grudge against advertising and see it as evil.

malbiniak 17y ago
I'm no 37signals, but I work closely with the advertising and marketing world. If I were to extend Jason's comments, I'd be shit nervous of making my primary revenue stream based on an ad model. It signals that the product/service I'm making doesn't provide enough value or utility to a single customer (even 1 out of 100) to compel them to give me some money. That's something to avoid, at least in the context of mitigating risk going to market.
- axod 17y ago
  Why is making money from advertising any more risky than trying to sell product directly? It's actually the opposite IMHO. If you're selling directly to people, you have one chance to get it right. You need to be 100% sure they will buy what you're selling, at the price you're proposing. Also for several types of service, charging the user may not make sense - who would pay for access to a search engine? With advertising, you're effectively acting as a middle-man, providing the users with the opportunity to buy millions of different things related to your own service. The risk is ridiculously low. That's why advertising as a model works so well on the web. Both are completely valid, good business models. It's just funny how 37singles take every opportunity to make out that a business making money from advertising isn't a 'real' business. The thing that hurts the model is silly people who slap up adsense, don't do their research or learn about how to make advertising work, and then moan about how they only make a few cents a day.

by axod 17y ago

malbiniak 17y ago

I'm no 37signals, but I work closely with the advertising and marketing world. If I were to extend Jason's comments, I'd be shit nervous of making my primary revenue stream based on an ad model. It signals that the product/service I'm making doesn't provide enough value or utility to a single customer (even 1 out of 100) to compel them to give me some money. That's something to avoid, at least in the context of mitigating risk going to market.

axod 17y ago
Why is making money from advertising any more risky than trying to sell product directly? It's actually the opposite IMHO. If you're selling directly to people, you have one chance to get it right. You need to be 100% sure they will buy what you're selling, at the price you're proposing. Also for several types of service, charging the user may not make sense - who would pay for access to a search engine? With advertising, you're effectively acting as a middle-man, providing the users with the opportunity to buy millions of different things related to your own service. The risk is ridiculously low. That's why advertising as a model works so well on the web. Both are completely valid, good business models. It's just funny how 37singles take every opportunity to make out that a business making money from advertising isn't a 'real' business. The thing that hurts the model is silly people who slap up adsense, don't do their research or learn about how to make advertising work, and then moan about how they only make a few cents a day.