The Hidden Truth About On-line Advertising Revenues

In my role I buy to satisfy literally lots of online content publishers each year and also the query I am most frequently asked is:

"Ought to we tend to offer our content away for free and make our money from advertising, or ought to we have a tendency to charge individuals to induce access to our content?"

Our answer is often the same.

"If you'll make as much money giving your content away at no cost and selling advertising space against it, as you'll build from running a paid subscription website, then go the free content route. It is easier".

But for ninety% of specialist information publishers they can never create as much from advertising revenues as they will from subscriptions and these are the reasons why.

Reason one - We tend to Solely Hear Regarding the Headline Advertising Figures

Anyone vaguely concerned with the web will frequently see figures being quoted about the dimensions of the online advertising market and the way quickly it's growing. However rarely do we see a breakdown of how these revenues are distributed. Thus here it is:

72% of all on-line advertising revenues go to only 10 firms

95% of all on-line advertising revenues go to only 50 firms

That leaves simply five% of the remaining revenues being distributed amongst tens of thousands of internet sites which are making an attempt to form cash from advertising. And amongst this cluster who have to pick up the scraps off the made advertisers table are several big international publishers. They are taking a huge chunk of the remaining 5%!

To put some numbers around these facts:

Within the US 5% of advertising revenues in 2005 was $620m

In the UK five% of advertising revenues in 2005 was ?40m

These don't seem to be huge figures when you're taking into consideration how several thousands of websites are attempting to get a piece of the action.

Reason two - Advertising is Driven by Traffic Volumes

The second reason is, prefer it or not, online advertising revenues are still largely driven by volumes of guests to a website. The everyday rates are $8/?five per thousand pageviews (even for Adsense). To make $one hundred,000 or ?sixty,000 in revenue you would want to be getting over thirty four,000 pageviews every day on your website.

Successful specialist on-line publications typically rely on having a coffee volume of highly interested and dependable readers. This doesn't suit a volume driven advertising model.

Conclusion

There are only 2 ways in which of creating money from content on the web. Free with advertising, or purchased access. Advertising is volume driven so does not suit niche sites with low numbers of loyal followers. Thus content house owners have one different and that's to charge for the content. They will try this together off downloads or provide access to content on an ongoing basis for a subscription fee.

by: James

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