Comments on: Your ad-supported Web 2.0 site is actually a B2B enterprise in disguise

By: Minimum Desirable Product | Andrew Chen (@andrew_chen)

Minimum Desirable Product | Andrew Chen (@andrew_chen) — Mon, 07 Dec 2009 14:47:17 +0000

[...] to break through a certain size to start talking to the brand ad agencies who can pay up on CPM. (More on that here) As a result of that, the goal becomes to hit product/market fit as soon as possible, and figure [...]

By: Kiubbo

Kiubbo — Sat, 20 Jun 2009 05:07:41 +0000

i know that feeling watching adsense numbers, and understand why so many people just forgets about the hole thing in that moment

i think there its a huge market oportunity for an adsense contender, someone who its more straight forward or open about payments and costs in the ad process

By: Kiubbo

Kiubbo — Fri, 19 Jun 2009 22:07:41 +0000

i know that feeling watching adsense numbers, and understand why so many people just forgets about the hole thing in that moment

i think there its a huge market oportunity for an adsense contender, someone who its more straight forward or open about payments and costs in the ad process

By: Benefit-Driven Metrics: Measure the lives you save, not the life preservers you sell | Futuristic Play by @Andrew_Chen

Thu, 11 Jun 2009 16:00:57 +0000

[...] to think this refers to the users of the product. But maybe not, as I’ve outlined before in Your ad-supported Web 2.0 site is actually a B2B enterprise in disguise. The reason is that your customer may actually be the advertiser on the site, not your [...]

By: Deborah Block-Schwenk

Deborah Block-Schwenk — Wed, 30 Apr 2008 22:03:12 +0000

Andrew, great post. I’m sorry to be so late in replying. What you are describing is a two-sided market (or what my company calls a “catalyst company”). The transition from a simple one-sided model (get users) to a two-sided model (we need enough users to make the advertisers happy and enough ads to pay the bills without being so annoying that users leave) is often rocky. As you describe so well, it also involves a new mindset and skills that may not be present in the company.

Our site http://www.catalystcode.com looks at web2.0, mobile and other industries from this two-sided perspective. Please take a look. Feedback is welcome.

By: Elad

Elad — Thu, 17 Apr 2008 15:20:14 +0000

Another option is to monetize using affiliate links, which is a more direct way than ads.
If (and only if) your content is very relevant to some kind of product so you can actually drive customer traffic to an online vendor (e.g. a music recommendation engine with affiliate links to iTunes/Amazon), you can probably make a pretty buck without the salesforce and other hassles that Andre mentions.

By: Douglas Galbi

Douglas Galbi — Mon, 07 Apr 2008 16:22:50 +0000

Nico Nico Douga, a Japanese video sharing and social networkworking site, is a great example of the freemium model. As of Jan. 2008, after a little over a year of operation, it had annualized revenues of about $25 million USD. Two-thirds of that is from premium membership. An interesting aspect of its success is that premium members account for only about 3% of its total members. So, good news, free users have value even apart from pummeling them with ads! For details and links to sources, see my post on purple motes:
http://purplemotes.net/2008/04/06/success-in-online-video-sharing-and-social-networking/

By: Christian

Christian — Sun, 06 Apr 2008 19:51:33 +0000

Andrew, you should start turning your stuff into an ebook and sell copies as your own freemium model You’d definitely find some buyers.
Regarding the post, you definitely need to sell to the advertisers because they pay the bills… And you also need to do it yourself because the ad networks don’t necessarily have the same incentives you do. We’ve worked with one of the vertical networks and so far it’s not been what we’ve hoped for – so we are building up the good-old sales force…

By: Rob Grady

Rob Grady — Sun, 06 Apr 2008 16:42:21 +0000

100% agree. If you did a value chain mapping, the product being sold is CPM to advertisers (business). While you need page views (and people) to make the product compelling, it is ultimately the advertisers that pay.

By: Chris Yeh

Chris Yeh — Sun, 06 Apr 2008 05:31:14 +0000

There is a lesson to be learned here--if something is easy, it's probably not worth doing.

If monetization were simply a matter of plugging in ad networks, everyone would be rich. Monetization (B2C or B2B) is always hard work, and anyone who thinks they can avoid it is deceiving themselves.

By: DJ Chang

DJ Chang — Sat, 05 Apr 2008 16:26:24 +0000

Hundreds of advertising networks are emerging to sell the brand advertising for you.

http://adecon101.blogspot.com/2008/02/list-of-adnets.html

Some cost 30% to 50% of revenues, but it allows the web 2.0 project to stay focused.

By: paul

paul — Sat, 05 Apr 2008 13:05:04 +0000

So perhaps big media networks, with their competencies in ad-sales and media creation, ARE fairly well placed after all..:p

By: bobafett

bobafett — Sat, 05 Apr 2008 11:27:14 +0000

can someone please explain to me what Andrew Chen is saying in plain english? (none of this technology speak please).

if I am a website owner, what must I do in order to act on Andrew's' advice?

By: Richard Giles

Richard Giles — Sat, 05 Apr 2008 10:59:14 +0000

Great post.

Rheingold's story sounds a lot like the one we had with Scouta. We built out our social network first, and then launched out B2B offering.

It's surprising how many web companies don't realize that you still need to focus most of your energy on traditional business values. Sales being a very important one. Although I'm CEO of the company, I spent almost all of my time as if I was a traditional sales person.

By: Leo Chen

Leo Chen — Sat, 05 Apr 2008 08:29:55 +0000

Sean, the point is that most B2C web startups focus too much on getting eye balls without figuring out a well differentiated platform to directly serve ads for advertisers. You can’t be profitable on a simple CPM model, just look at Facebook, they’re still trying to figure out how to be profitable. Every startup says they want to do “targeted advertising” but very few have actually come up with a compelling value prop for advertisers. Why? Because they’re only focusing on traffic. Most web startups have one mission: get traffic, get acquired. The odds of this happening is only getting lower.