Another blindspot: advertising-based services

Being a FOG (Follower of Guy) for many years now, I now get daily doses of his wisdom on a regular basis. A recent post on his website stats has a few great gems in it, but one comment on click-thru advertising was enough for me to launch on another Blindspot rant.

Advertising is not the panacea for free services that everyone makes it out to be.

First of all, people act like Google invented the tools for advertising supported websites. Uh, anyone remember ad banners, pop-ups, and other regular advertising channels on websites?

Second (see Guy’s quote below), click-thru metrics only pay significantly if you have enough traffic, say Google’s or Yahoo’s. Sure, some sites are making some chump change with AdSense, no problems there, but don’t try to build a company on it (or a company of more than one person). I’ve been saying that for some time now, and folks have been looking at me as if I was spouting heresy.

Here’s what Guy says, spot on with what I’ve been saying:

I spend about two hours per day on the blog, so I’m making about $5/hour. 🙂 Also, if any company comes to Garage and says that their business model is to generate a lot of page views and monetize it with Google AdSense, I’m going to be figuring that each page impression is worth $.001. For example, 10 million page impressions would yield $10,000/month. It’s not that hard to get 10 million page views in a month, right? 🙂 “We’ll generate a lot of traffic and monetize it with Google AdSense” is hereby labeled the 11th lie of entrepreneurs.

Third, if you want to run an advertising-supported service, study how the pros do it. No, don’t go looking on the Internet. Go to your nearest news kiosk. Print publications have been heavily advertising-supported
for a very long time (heck, there is no front page news on the main Helsinki rag, it’s always an ad). Practically all subscription magazines and
newspapers are advertising-based. And they have whole departments working to get advertising that brings in money, that is relevant is relevant to the publication, that is relevant to the reader. Not only is AdSense an automated system that is second best to targeted ads, but you have little control as to what it shows.

Fourth, who makes the money? Google AdSense users aggregate a huge number clicks that bring most of the money to Google, not to the users. Look at Guy’s stats again.

Mobile?

It wasn’t just Guy’s comment on AdSense that got me going, but MoMo Mike pointing out a comment on mobile advertising from the W3C’s Mobile Web Best Practices:

Developers of commercial web sites should note that different
commercial models are often at work when the Web is accessed from
Mobile devices as compared with desktop devices.

You betcha. When you open up a Web page on your PC, you have enough space not to care about those pesky links somewhere else on your screen. Also, your browsing experience really doesn’t take a hit, nor do you have to really pay for that advertising to be served to you.

Not so on the mobile, where space is precious, the environment is personal, time is critical, and cost is a sensitive subject.

Enough of the rant. Here are some positive suggestions.

Don’t think of advertising-supported services, as that will make you think of traditional advertising. Think ‘marketing-supported’ services and then you will start to think of other ways to have someone pay for your users’ free service. I think if you make clear the ‘cost’ to the user for using a free service is you channeling brands and such to them.

For example, a company could sponsor a Java game that would have the sponsor’s branding displayed in an integrated and unintrusive fashion.

Or, if you have a really cool local map client (uh, maybe Google Local Mobile). When you get the info on the venue in that nifty pop-up, there could be an ad or two. Maybe even a local ad.

Or, think of how your service could be a door to other better paying business, such as consulting or upgrades to paid service. Using a free service or content to drive sales at a store is quite common, that I won’t even list the sites that do this.*

So there

As you can tell, this is not just a blindspot I don’t understand, but something that I think really others have a blindspot to. I am like guy and shudder whenever anyone says they want to start a business based on AdSense. Heck, that’s NonSense.

 

*Well, this one, Treonauts, I think is nifty. It’s a blog that grew into much more. That’s how you give free stuff away to bring in folks long enough to have they leave some money behind. 🙂