Why Ad-Free And Web 2.0 Don't Mix
I understand the intuition of the people proposing this revenue model. They know that consumers dislike ads. But they also know that ads are a “necessary evil” in order to make free web services sustainable, or even profitable. So, they’re trying to strike a compromise with consumers that appeases both free-zealots and anti-advertising-zealots.
But, this revenue model seems silly to me. Advertisers pay a premium in order to reach people in their specific demographic with disposable income. This idea of people paying to remove ads ensures that the audience for your ads are actually CHEAPER than the average internet audience.
Why? Because the people in your audience with disposable income who are willing to pay for web services are the same ones that will self-select out of your audience for your ads. So, all that remains in your audience are people that are too cheap to opt out. That doesn’t sound like the audience that Disney (DIS), Coca Cola (CKE), or even your average direct response advertiser wants to reach.
Paying to remove advertising is an interesting thought, but it’s not fully baked at this point. The real sustainable solution is to create “paid content” that your audience doesn’t actually view as “ads.” For example, the last time I tried Adblock Pro, I noticed that it didn’t remove AdWords (GOOG)… in other words, the creator of the ad blacklist I used saw AdWords more as content than as advertising. That’s the real home run.
Andrew Parker is an associate at Union Square Ventures and blogs at The Gong Show, where the original version of this post ran.
For Andrew...
My install of Adblock Pro even removes Adwords on Google search pages. Note - I only use ABP while on my own pages, so stats aren't inflated, but it does work.
See here: http://michaelgracie.com/2007/09/03/whiting-out-the-ads-but-at-what-cost/
Why couldn't a website offer instead of "ad-free" something like "minimal ads". So the premium version of the product has more features and reduces the obvious advertising like 90% to the point where some "premium" advertisers still can include some minimal and well-produced, subtle "paid content".
It's a thought.
If your customer is a consumer, the model may have trouble (though I've been a Premium reader of Salon.com for 6 or so years).
But if your customer is a business, of course you can have them pay to remove your advertising (and put in theirs). That's either called arbitrage or brand management. Either way, people will pay to remove ads in that scenario.
Your assuming that a signficant portion of people who don't pay to get an ad-free version of the site do it because they're too cheap.
Can't think of any other reasons?
How about:
1)Can't be bothered to go through all the steps necessary to register.
2)Don't want to have the burden of managing many different subscriptions to many different sites.
3)Don't want to unecessarily provide my credit card information to every site I want to use.
4)Like the content, but not enough to pay for it.
5)ETC ETC.
Just because I don't want to pay for the freemium version of dictionary.com doesn't mean I'm not interested in the LL Bean Clothes advertised on the site.
1) EA's casual games behemoth, Pogo.com
Pogo users who don't like ads pay a small ($2-$5) monthly premium for an ad-free version of the service. payers also get some premium content and prizes etc
EA is doing well north of $100MM/year from these payers
2) HBO
3) Consumer Reports
4) et al...
If you offer an ad-free plan and no one takes it (Slashdot) that's one kind of failure...
...but what Andrew's talking about is that if you offer an plan, you would lose money for each incremental uptake you get.
Completely different arguments.
For example, I have never ever ever seen an ad on SAI (not while using Firefox, anyway). If it was normal for everyone to use Adblock, they wouldn't see the ads, either.
The nice thing about Adblock Plus with Element Hiding is you not only remove the ads, but automatically rearrange the CSS so that you can't even tell where the ads were.
I pay sites to support them, not just to make the ads go away. Forcing me to look at ads unless I pay for use of the site forces me to go away unless that site is very important to me. Simple as that.
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I could not agree with this statement more than if I had said it myself. But, I think it is a great compromise between over powering ads and paid services. I think it is a viable model. Ads are only good for so long before a user becomes blind to them. So, if a user finds them annoying they can pay to have them removed. This would normally happen after the user has become blind to the ads?
Gordon
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