Google launches Contributor, a crowdfunding tool for publishers
gigaom.com
gigaom.com
An ad supported site works like this:
1. They spend effort producing some content. 2. You want to give all of your attention to that content. 3. Advertisers also want your attention. 4. To support their efforts, the creator diverts a fraction of your attention away from the content to the ad and the advertiser pays them for it.
With this system, you basically bid and buy back that fraction of the attention diverted to advertising, and that money goes directly to the creator.
One really interesting aspect of this is determining what your own attention is "worth" on the open market. By building this on top of AdWords system, they can calculate that automatically. If advertisers decide your attention is worth more and want to keep those ads in front of your face, they have to pay more, which again goes to the content creator.
I think it's brilliant.
Ad-supported sites fool consumers into thinking they're getting something for free, when in fact they're still paying, just indirectly . And not just the original straight-up price, but a host of additional costs[1]. Don't believe me? Where do you think the advertisers get the money to buy ad space? Of course it's baked into the products consumers buy from them. There is no free lunch.
What does it say about your product if users aren't willing to pay for it? What does it say about your business when you tell users its free but don't tell them you've hidden your charges in the prices of the products that are advertised? That it's actually costing them more?[1]
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The place where I buy pizza has to pay for the ingredients, the rent, salaries, etc. These costs and a reasonable profit add up to $18 for a pie, which I pay, because their pizza is worth at least $18. What if their pizza wasn't so good, and too few customers thought it was worth $18? Is it right for them to hand out "free" pizza in a box covered with advertising inside and out, and the advertised products get marked up $22 to cover the pizza cost as well as the advertising overhead and collateral costs[1]? Let me be clear: the customers are getting a pizza that costs $18 for "free", but $22 is added to the cost of the other goods they buy. They don't realize this and the pizza shop is taking advantage of this ignorance.
> "And what does it say about you if you want to use a product and not aren't willing to pay for it? Not even indirectly via ads?"
If you're referring to me, I'm totally willing to pay for it. If you mean people in general, they fall into three categories:
1. They are willing to pay for it. They wish there weren't ads, and switch to ad-free, for-pay products when available.
2. They are willing to pay for it, but are happy to take what appears to be free.
3. They are not willing to pay for it, but are happy to take what appears to be free.
Both #2 and #3 don't realize that instead of being free, it costs a lot more. Or they are too lazy to find a for-pay product. Or they think they don't buy advertised products and are happy to mooch off of others.
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[1] If I don't buy those products, someone else must be, in which case they are subsidizing my pizza. I'll bet the effects are regressive, in that people with lower incomes end up subsidizing people with higher. In any case, on average we all pay for the true cost of the "free" product plus the previously mentioned overhead and collateral costs.
Good products get found the natural way: customers tell other customers. Why? Because the product is good!
Most advertising is manipulation of perceptions of goodness. Or about using dominant market position and revenue to maintain that dominance, drowning out better rivals who can't afford a similar ad budget (Advertising people are honest about this and call it a moat).
Need to explain your product or its benefits? Put up a website. If the claims are true, customers will pass the link around. You only need to pay to get someone to insert your product in the grapevine if your product isn't good.
If they aren't, then the price won't go that high, the advertising won't be worthwhile, and you won't be offered a free pizza.
(this is not sarcasm, I actually think this is amazing in terms of strategy)
...but how will they grow revenue in ~5 years when everyone has paid to remove ads?
Won't they put themselves out of business because if nobody is looking at ads, nobody will be paying for ads, so then there won't be any ads to display, and everyone will stop paying to not see ads.
(genuine question)
But the ones that don't want to see ads may pay Google instead of using AdBlock. Also, some publishers may decide to use Google's solution instead of an in-house one, which allows Google not to be bypassed.
If all that was to fail, I'm sure Google will find new problems to solve and more ways to grow revenue.
Er, aren't most of the listed parters known for reposting unoriginal content from other parts of the web?
I'm a fan of Patreon because it helps facilitate good original content which the internet needs. This doesn't.
Interesting concept. Let me pay some money that gets split between the sites I actually visit and get out of seeing ads - I wonder how many users of adblock today would use this instead. I guess the problem is that google isn't the only ad network.
I bet this'll be a powerful incentive for publishers who don't want to annoy their users to switch to adsense.
There's an enormous gap between Mashable and Jim Sterling, or Red Letter Media. Creating something people care about is doable, but being someone that people care about is far more difficult for any of the listed publishers.
For me, it comes to $100+ per month but that seems like a steep price to pay.
How do you compute that number?
Rest is made of long tail. These are what I would be willing to pay for these services
EDIT: And I just realized that means you'd be willing to pay.
The thing to keep in mind is that the ad supported model is amazing for trying things out, so we really need both.
Having used gmail since I was in high school, I would not have been able to pay for it then, but nowadays its invaluable, and 10$/m is a drop in the bucket.
I had an interesting self discovery. After I insulted a coworker for not being able to think for himself; always parroting Rush, he challenged me to listening to his radio show for one week. I did. I was surprised at what I learned.
I never, ever listen or watch commercials. It's subconscious. I could not change the radio during commercials as I had to listen to his show. It KILLED me. I NEVER listen to commercials.
Then I realized I flip if I watch TV. If I listen to radio, I change the station automatically when I hear a commercial. YouTube, turn down sound. Automatically. TV shows, watch after it starts so I can fast forward via Tivo.
Same goes for anything pay online. See a pay requirement? Go away. I realize I don't buy any online content; No site I have ever gone to is worth paying (directly).
By the way, I pay for internet access 4 ways each month; cable ($50); two phones ($100); library internet access ($~100 via property taxes used to fund town library). I pay enough.
How does this work for publishers? Do they get paid a fixed amount per impression? Is it proportional to the time spent on the website? Does the website benefit from having higher spenders visit their website?
I really can't even use the Internet without Adblock. I install it on every computer I use.
I don't think this will succeed. I am not willing to pay when I have other options available.
Also, this ties in with Google's efforts in payment space.
Because they had said they track me to show me those ads and now that I've paid them to remove those ads, I hope they can stop tracking me, shall they?
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$3/month/user
10 sites the user visits daily (for argument's sake)
3 pages visited per site (for argument's sake)
30 days per month
=>
Each site: $3 * 1/10 * 1/30 => $0.01/day/user
Each page: $0.01/day/user over 3 sites/user/day => ~$3.33 CPM.
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Publishers right now average higher (~$5, up to $15) CPM, so this sounds like something that will lose them money for a non-biased set of users. Of course, maybe this selects for folks who otherwise wouldn't click on ads... I guess we will find out. It could also just select for publishers that are not able to monetize their content effectively.
Right now content creators are implementing freemium in an unattractive way - I completely stopped reading wsj.com after recent changes to their paywall, and I will immediately close a news article that throws a video in my face. But if the motley banners of Adwords are merely converted into "thank you" messages after I pay a couple bucks every month, the website hasn't suddenly become attractive to me, just less unattractive.
And when you compare this to ad blocking, hopefully you realize that ad blocking is not the most ethical thing to do; you are effectively stealing content. Most ad-supported websites clearly forbid this with TOS wording like: "The copying, reproduction, ..., or other use or change by you, directly or indirectly, of any such Website Content, including but not limited to the removal or alteration of advertising, is strictly prohibited" (Ars). Not all websites are good players either, but if the advertising practices of specific sites are bad then your only ethical choice is to not visit them at all.