An ad supported web grows quickly and is open to those who can’t or won’t pay. But it has at least four downsides as a default business model.
His story is excellent and well worth the read. He does miss one significant downside of an ad-supported web: It’s not easy for small guys to make any money.
Take the number he uses for Facebook: $0.60 per user in profit.
Now take a site like this and let’s use my RSS subscriber count of 12,254 subscribers. That’s a yearly (I think the 0.60 number is a quarterly number) profit of $29,409.60. Or $14 per hour — if you can get that rate from advertisers (not likely).
And that’s the problem: unless you have massive users, you cannot make livable wages from the Internet. (Just take a look at the pennies that great writers are asking for in return to be able to afford to do what they love. Amazing.) But to get enough users you have to start at 0, and from 0 to say 1,500 you won’t make a dime.
Back to this site once again, which launched 4/29/10, or just under two quarters into 2010. I have 6,617 posts, not including this post. If I managed to get that $29,409.60 per year from the start, I would have been paid just $15.16 per post I have published — that the most. And that’s it.
Making money on the web is incredibly challenging even without ads. I use a pure membership/paywall model and, though stable, it makes even less (by a lot) than I would with ads. And my site is decently sized.
To me, this is a bigger problem than ads tracking users. We all want the best web we can have, but seemingly no one is willing to pay for it. Not the advertisers, who only want to focus on the huge sites so that don’t feel like they are wasting money, and not the users/readers of sites — no matter how much they may love a site.
I’m not complaining about how little this site makes, well maybe I am, but more so I am complaining about how little every site makes. You have huge sites charging advertisers half their yearly budgets, while churning out absolute shit, while fantastic writers spend all their free time writing and maybe even being chastised by their significant others for spending time on something which likely costs that writer money each month to do.
I spent almost a year making no money on this site before I started making anything. A year. And I got extremely lucky that it wasn’t longer.