Ad Based Revenue Models: Providing “Free” Solutions to All

Online or in the app store, one of the best advents of the digital age has been the rise of “free” software.  In the past when you wanted a computer game, to automate a function using the computer, or do anything else with a computer, you had to purchase the software, install it, and eventually even pay for the upgrade (or suffer with the bugs in your current version).  Now, you can get games, business applications, medical applications, and a whole host of other types of software at no cost to you.  But developing those programs takes time and money, so how can developers afford to give their products away for free.  The answer is they can’t, so they have come up with a number of ways to make money off of their programs without charging the user.  Software companies do this by using an ad based revenue model.

What is an Ad Based Revenue Model?

Simply put, this is a model where companies make money off of a product by selling advertising instead of charging for a product.  As a culture we are already very familiar with ad based revenue models.  That is how newspapers, TV networks, and radio stations all make their money despite the fact that they provide much of their content free of cost  or at very low cost to consumers. Since the internet and software both represent very diverse media, several types of ad based revenue types have developed to help entrepreneurs make the most of the traffic they have.

Pay Per Click

This is the most straight forward ad based revenue scheme on the market. A company places an ad on your page or application and you get a small commission each time someone clicks on the ad.  In this model advertisers benefit from highly targeted audiences and the fact that they only pay when the ad works.

Pay Per Impression

This model is based on the idea that it takes certain number of media touches for a brand to form a favorable impression with viewers.  To increase the number of media touches, companies will pay for ads that will be seen even if they are unlikely to be clicked.  When you place one of these ads on your blog, application, or website you get paid for the number of people who see the ad.  That means that your users don’t have to do anything with them.  This is one of the more common methods of advertising on the internet, especially since people are quite rightly afraid to click on anything that they aren’t sure about.

Sponsorship

This model is a lot harder to pull off.  Basically if you have a highly specialized application or website, you can see if certain companies will pay you to feature only or primarily their products.  For instance if you ran a tech blog that focused on using Microsoft products to their fullest capability, you might be able to get Microsoft to sponsor your blog.

Affiliate Marketing

Affiliate marketing is similar to pay per click models.  In this revenue model, you place links to products on your page and you get a commission if your users click on an ad and make a purchase.  Advertisers benefit from highly targeted audiences and you enjoy a higher commission than on pay per click and pay per impression models.

With the exception of Sponsorship each of these methods is fairly simple to implement on your application.  There are many companies whose sole function is to help digital creators reap the benefits of their creations.  However, even with the presence of companies who sell the advertisements and might even tell you how to place them (or do so themselves), there are several questions to consider.

Which model will best suit me and my business?  Making money with ad based revenue models is all about choosing the right one.  For instance if you have a steady but small stream of viewers, pay per impression might not be for you because there just aren’t enough eyes on your blog to make a difference.

Which company should I trust? There are some big name reputable companies out there, but there are also some very shady companies out there that can wreak havoc with your site, your users computers, and impact your bond of trust with your users.

What is the best way to implement my ad based revenue model? While some companies will help you with that not all will.  Furthermore, if you aren’t informed of the possibilities, you can end up with a strategy that doesn’t work for you.

To help you make the most of your ad based revenue models, it is a good idea to get the help of trained IT professionals.  An IT consultant can help you pick a revenue model, will know the best companies to work with, and will be able to help you integrate advertisements on your blog or application in a way that makes sense and isn’t obtrusive.  The professionals at Nourtek Solutions can help you with these decisions.  To learn more about how to implement an ad based revenue model for your new venture please contact us today.

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