I recently had a brief email discussion with a successful entrepreneur, whose opinion I respect, greatly. I was commending him for having a couple standard ad placements on his site, as I know the value of his audience is both unique and high. I assumed he was testing their efficacy and would rollout, if effective.
His response was that they didn’t have the volume or desire to be an ad business. His Company is an online community that has taken money from high profile successful venture investors and most likely going for a large exit - if not 9 figures, then 10.
I completely agree.
The most successful online properties that have achieved financial success through advertising have operated on such a large scale that they’ve been able to create their own advertising units.
The obvious example here is Google (who then became the largest middle-man in online advertising), Facebook has taken a similar path (and that they aren’t challenging Google with 3rd party ad products, is surprising, but I’ll keep waiting), Twitter (http://bit.ly/I6fRHR) and Tumblr (http://bit.ly/I6fRHR) are both trying and have massive audiences (success to be determined). Not surprisingly, Native Monetization is one of the most common buzzwords I hear when meeting with new web and mobile companies.
If you’re building an online property that plans to rely on ad revenue and doesn’t generate hundreds of millions of users and tens of millions of very active users, then you might be able to build a great property with a lean team that’s a great lifestyle business with solid cash flow…
Or maybe you’ve got a bigger vision and you’re going to completely change the way we monetize online content through a new form of brands interacting with consumers (call it what you want, it’s still advertising) or through a new data product (where many are heading and where I think Twitter will have the most success).
Awesome. Do it. We need more and more entrepreneurs pushing the envelope here. But how are you going to fund it? There are many funding options available, but don’t overlook tapping into the AdTech ecosystem and very simply generating significant revenue to fund your future growth. It may not be sexy and maybe you / your designers will scoff at having to include an ad in their design - but do you know what is sexy…REVENUE!
So how do you do it? That will be covered in my next post…I know you can’t wait!