On advertising based revenue models.

Many sites are relying on advertising revenue to sustain their activity, expecially the new sites like youtube and myspace (from what I can tell they have no other major income… if you know differently, please let me know).

Many people believe that advertising on the Internet is not a sustainable revenue model…. and with reason.

Google Search does advertising very well … because when you search for something … often there are commercial sites that can help you find what you want. In that sense, the advertising displayed on the right of the Google search page is a ‘value add’. It is actually helping you do what you want to do.

When you go to youtube, and do a search for  ‘peates ridge festival drummers’ (a festival I went to recently) I get ads for:

  1. SW and HW Design. Software and Hardware designs for your embedded system needs.
  2. Brain Sound Studio. Software to embedd brainwaves into sound.
  3. Dynamic Targeted Email.
  4. MP3 accessories.
  5. FLV Video.

I am looking for videos of a specific event at the Peates Ridge festival that had lots of drummers. None of that advertising is useful to me….

The chances of me clicking on them is tiny, compared to the chances of me clikcing on an add for good surround sound speakers on a site that published surround sound files. That is because I am on that site because I am into surround sound, and I am hence very interested in good surround speakers.

For the advertising to work, it has to be a ‘value add’ to why the person is going to that site.

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