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
2. Offer your service for free + put ads that generate revenue
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