Advertising is not a good revenue model for big sites?

jesusphreak · November 2005

I've been hearing comments here and there about how advertising is a bad revenue model, especially for big sites. Can anyone comment/confirm this for me? I'm just interested in the whole thing.

ADM · November 2005

I don't really think theres that much money in advertising as a whole. You'd probably make more money selling subscription packs for those larger sites.

jesusphreak · November 2005

I'm just wonder how a site like digg would make money, or how del.icio.us would make money if it tried.

3stripe · November 2005

Hmm, del.icio.us with google-style targeted text adverts :-(

jesusphreak · November 2005

Why the :-( ?

3stripe · November 2005

Just a wee frown... dunno, I find delicious confusing enuff without more links all over the shop!

jesusphreak · November 2005

Heh.

ADM · November 2005

How does del.icio.us make money?

nathan · November 2005

does it? I assume it would to cover running costs, but I can't see where they would. I don't use it often. As 3stripe said, the interface is a little confusing, and I don't like to have to concentrate really hard to gt where I am going. I'm just lazy.

ADM · November 2005

I use it alot.. but I agree with you that I don't see how they could make that much money off it. There's ALOT of potential there that I'm suprised that they haven't got any suscriber features or anything where they could get abit of cash out of it.

jesusphreak · November 2005

What features could they actually offer to subscribers? The whole idea of social bookmarking isn't terribly complicated nor difficult to setup. I just don't know what they could offer to subscribers...besides possibly allowing them to host and tag files there....but then you run into copyright/piracy issues.

ADM · November 2005

Hmm not too sure.. maybe have ads on the site then subscribers could have ads removed. Non-Subscribers could also have a limit on the amount of links they can have, or other limitations like that. Subscribe and all the limitations gets removed.

3stripe · November 2005

I just can't believe that del.icio.us is so poorly designed when it's clearly used by so many of the poeple who are building the web and are right at the fore of everything that's been kicking off recently. My grannie could design a better site! Heheh

Kosmo · November 2005

Kudos to your grannie.

ADM · November 2005

Personally I really like the simplicity of del.icio.us. Also it's been updated a touch recently anyway.

Kosmo · November 2005

I haven't used del.iciou.us al.most.at.all so I don't think that is is simple, it's way too confusing, they have all that information going on in their frontpage, they should either hide it somewhere so it isn't intimidating and bit cleaner and more spacious feel to it wouldn't hurt them at all.

jesusphreak · November 2005

del.icio.us I think is doomed to be relegated to being the geeky forerunner of a much better service.

Even its very domain spells disaster when it comes to casual users. The layout, different aspects of it, none of it just makes sense, and Google proved that if you are simple and make sense, people will love you for it.

Realistically, del.icio.us could be written in a single 24-hour period in Ruby on Rails, it just isn't that complicated. For all the VC funding del.icio.us got, it sure doesn't seem to be using it. I mean, really, how much time could it take to make a new layout?

giginger · November 2005

The lack of a coherent layout really is a hinderance to delicious getting a wider acknowledgement/support. It's only certain circles of internet users that use it.

It's a fantastic idea and I've given it a whirl but it's just not user friendly. It's as simple as that to me.

3stripe · November 2005

Yup yup yup... I've tried several times to explain several times to non-techy mates why delicious could be useful for them... none of them get it, or show any interest in what it does or how it could help them.....

jesusphreak · November 2005

Its probably because its mainly geeks that need to be able to save a bunch of different webpages and "tag" them. I think for the casual user, its always just easier to do a quick Google. That's why I think Yahoo's MyWeb approach is probably best - as it lets you save items you find while searching.

shad0w913 · November 2005

Many people use an ad/subscription model. They have ads, and if you subscribe, they get rid of the ads. That's how giant sites like IGN do it. Then again, there are also CNET sites that seem to make their profit purely from advertising. Try reading problogger, he talks a lot about making oodles of cash blogging.

Ghazi · December 2005

jesusphreak said:
I'm just wonder how a site like digg would make money, or how del.icio.us would make money if it tried.

This is how!

jesusphreak · December 2005

lol...yeah...

But how will del.icio.us now make money for Yahoo?

Grep · December 2005

Back in the .com days I was doing media buys for several firms. It was the case that if you wanted to generate real hits you had to advertise offline, one advert in a Sunday magazine or newspaper could garner 20 - to 75,000 hits [depending on the size of advert and the paper you could be spending 20 â€“ 50GBP, a full page advert in a UK national daily begins at around 100K GBP so you can imagine how much Dell spends]. Online adverts were not nearly so effective - a 50k GBP spend would only generate 10,000 hits with the best referrers [keywords on search engines] having a 2% click-thru. Over the last two years online advertising hit pay-dirt: It began to work! Infact, this year, for the first time ever online ad spend actually exceeded offline ad spend. Thanks in large part to Rich media [flash] advertising, ever present Google ads, and a shift in user culture, people began not only clicking on the ads but actually doing things when they got to the other end! Most large sites aim for a 3 - 5% conversion, 3% being the average - so you have a site thatâ€™s gets say 100,000 unique hits a day with a 3% click-thru earning them 25c per click and you're looking down the nose of 750USD per day [close to 300,000 per year], 1,250USD if you can get a 5% conversion. Now consider that Job sites will pay up to 2.50USD for a successful registration, software/hardware companies like MS, IBM and HP pay up to 5USD for a registered product enquiry (the only other companies that pay that kind of cash are adult sites) and you begin to see how you can make money. Amazon pay a good deal of cash too plus many smaller retailers offer excellent payouts for purchases â€“ and thatâ€™s really the key for everyone in sales and marketing; online adverts have quantifiable results that donâ€™t cost money to measure, if you check the success of your offline ads are working you have to pay for surveys. In conclusion advertising is a very effective model for websites, especially communities as the webmasters can actively solicit the users to click on adverts - even smaller sites like Planet-Tolkien [10,000 unique hits a week] do pretty well. We make around 300 USD per month which covers the hosting nicely.

jos · December 2005

What's your conversion rate for your google ads? And what's the conversion rate when you don't solicit clicks?

Grep · December 2005

It's a bit hard to say without adding all the different sources up - at a guess it's 3% give or take. Google brings in about $40 - $50 USD, on the solicting front i ask all the members to click on one of our Amazon links when they have anything to buy there so we get a %age which brings in another $100USD. The sideshow weta collectables bring in another $100 USD and the remainder comes in from the Newline cinema shop, the iTunes music store and this little german company who make very beautifal and very expensive LOTR jewelery; giving us 25USD when we send them a buyer.

jos · December 2005

That's done nicely. Another 10 such sites and you can quit your daytime job. :-) I see p-t has a PR of 4-5 so if you can optimize a bit I guess you could improve. Eg I see no <h1> used. There is some discussion about whether this is still part of the google algorithm but it won't hurt using one. There probably are other things too that can be improved. Be careful asking visitors to click google ads. I don't know about this for amazon (this doesn't hurt the advertising model here) but I know google is able to penalize this.

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Advertising is not a good revenue model for big sites?

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