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24 Sep 2008 15:34
It's about free web services that earn money from ads placed on user-generated content pages. This is exactly how Wikidot.com could earn money and how Wordpress.com and thousands of others are generating their revenue. Some people have nothing against it, some would never use a service with such ads.
For services like Wikidot (we are hosting almost 100k websites created by our users) major options are:
1. Make your users pay for using the service
or
2. Offer your service for free + put ads that generate revenue
or
3. Make the basic service free, but charge for premium
Most services combine variant 2. and 3. However our study back in 2006 (when we were trying to run variant 2) showed that many users that came to Wikidot were really discouraged by ads we were showing at that time an all our pages. We agreed that the idea of wiki, free internet and professional collaboration platform did not really go to well with enforced ads.
We have decided to take down almost all the ads. Wikidot was quite small then. It did help us a lot in gaining popularity and getting new users.
From the perspective I really think it was a good idea. If we kept the ads, Wikidot would not be as large as it is now for sure. Sure we could be earning quite a lot if we had the traffic we are having now with over a million pageviews a day, but it would be much more difficult to create the positive aura that surrounds Wikidot right now.
For quite a long time at Wikidot we have been using another approach: let the users decide if they want to earn money with ads on their wikis. If so, we are giving them tools to do this (integration with AdSense API) and we share revenue with them. Fair enough and in fact a lot of users enrolled into the program. It is an opt-in option.
It also looks like enforcing ads does not really work for blogs and wikis — those kinds of web property often get very personal and authors do not like when someone messes with their content. Also they are putting a lot of effort into creating unique content and they feel it would be just unfair that someone else benefits from this content monetizing it by ads.
When running a service like Wikidot I think one of the most important things is to respect your users and effort they put in creating their content. In fact this is the rule number one. And this is exactly the approach we have.
Recently we are moving towards the model when the "basic" service at Wikidot.com remains free, but premium features will be paid. Honestly, "basic" is already worth quite a lot and for the package you get free at Wikidot.com you could pay a few hundred dollars at some of our competitors. Anyway, moving towards the paid model has many advantages, not only financial ones for us, but also for the users. I will blog about this next time, so check one of my next posts in a few days.
BTW: I higly recommend reading an excellent article The Danger of Free.
rating: 3, tags: ads marketing monetization wikidot
Nice post! I am really pissed off by the way some services put ad boxes over the content I write. I wonder how Wikidot manages to survive without being so aggressive. Good job keeping the Internet free and fair!!!!!!!
also, it is worth keeping in mind that it is against Flickr's terms of use to generate revenue (such as that from ads) on sites that display Flickr hosted content. Since many of the wikis here rely on Flickr to present content, i thought that might be a valid concern. Overall, I get the feeling that you really understand your userbase well, are headed in the right direction, and are guided by a good philosophy. I just hope the "basic" version stays as powerful as it is now and doesn't become filled with a bunch of arbitrary limitations like every other wiki farm.
Another possible option, in addition to 1, 2 and 3, could be:
a) "charge for training" how to use the product
OR
b) "charge a "rent" on a virtual marketplace for tutors.
I have elaborated on the latter: http://community.wikidot.com/forum/t-87870/wikis-wikidot-and-business-models
I feel b) is the better option because it would let the Wikidot team have an additional revenue stream while remaining focused on the core of their business - the development of the Wikidot platform, not on teaching (lazy) people how to use it.
http://feedback.wikidot.com/wish:382
You're completely right about the negative aspects of forced ads, Michal. Opt-in advertising is a much better approach, as is premium pricing for extras. Respect builds a community. A community cares about you making money too.