Methods of monetization of Internet projects
Let's talk about the important aspect of the existence of any site, about the existing methods of monetization and their application in real projects. From this it seems a very small thing depends on the future of the project and its prospects for the market.
The model, with a monthly payment is quite common, is considered to be the Asian model of monetization, as it was often used in Korean online games. The basic principle is that in order to continue using the product, it is necessary to pay for it, while in the model with a regular subscription, all users pay for the service monthly.
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Users get basic functionality for free, and pay for additional options.
Usually there is, along with the opportunity to use the service for free, while the subscribers of the subscription get some advantages over regular users, such as:
Purchase of services or goods, if necessary, these goods. The most standard way is used at the moment when the user needs this service, for example the opportunity to create a new project, buy minutes of conversation, order a t-shirt or sneakers from the online store.
The user can buy as one unit of goods, and a package of services, which includes a set of items, such as a mug in a gift box with delivery.
In addition to the sale of real goods and services, you can sell virtual (hearts, dogs, badges), the main difference is that they do not provide real benefits, but give only status or decoration for a user account. Also, such products can be distributed as a promotion for the most active users.
This method is used by services by intermediaries, and consists in receiving a percentage from each sale of the main service. In general, can be divided into 2 large categories:
The most popular method, which is mentioned in almost all business plans, presentations, meetings, P & L models, and becomes the very magic wand that seems to save everyone.
The amount of income from an advertising article in all plans is usually equal to the amount that will cover all expenses, provide income, and the brand new handsome Mercedes to the creators, to the question why advertising revenues are now zero, the answer is unwind, and sell everything.
So, let's try to calculate how much a project can earn on media and contextual advertising.
For example, to earn $ 10,000 per month, you need:
It is necessary to take into account the fact that display advertising itself is not for sale, and for its sale it is necessary to hire a sales specialist, or enter into an agreement with an agency who are interested only in large sites.
In fact, it is indirect advertising. The service receives money for the customers listed, and a percentage of the purchases of these customers. Revenue sharing is usually based on creating a partner interface, in which you can see how many clients are attracted, and how much income they brought.
Many survey services, and audience measurements are ready to pay for user activities, such as filling out questionnaires, registering on sites and passing interactive surveys.
Often, product placement concepts are mixed with regular display advertising, but this is a slightly different niche, it has a different set of advertising media, and therefore even at times when the entire inventory of advertising placement is already sold, you can always find a place for product placement.
You also need to understand the difference when you advertise in the form of banners, users understand that this is just advertising, but if you are branding elements of your website or the application Adidas or Coca cola, the user will assume that the service is more strongly associated with the specified brand.
“Lift your resume”, “Be the first in the top”, and others, they all exploit the same principle, the desire of a person to stand out, and become different from others. In our market, this type of monetization first appeared on services such as Mamba and Loveplanet.
It is clear to all that with the number of registrations of 100 or more per day, newly created accounts very quickly fall into the abyss, and new users, resumes, projects, and more constantly appear on top. You can of course try to rank these entities for other parameters different from the time of addition, but it is the ability to stay on top, or return to the top allowed to develop and grow the above services.
In fact, this method is not a separate way to monetize, as it is only an intermediary between real money and the purchase of goods and services on the site. However, for many projects, it is a necessary step, because, in fact, you can start managing your money as soon as you bought virtual currency for them, even if the services themselves are provided much later.
It is very important at the first stages before starting the service to think over what you are going to earn, you should not expect that you first take over the world, and then happiness will come, usually everything ends prosaic, the world is not captured yet, and the money from the creators has already ended.
It is possible and necessary to use mixed models of monetization such as, subscription + provision of one-time services + advertising, and so on. As the project lives, you need to change the business model, try different ways, look for those that will work better for you.
Used in Wikipedia for the annual collection of funds for the development of the project, has also been and remains popular with many blogs and communities in which direct monetization is impossible.
Payment systems such as Yandex.Money, WebMoney and Robokassa offer special buttons for automatic fundraising in favor of the project, but their practical application in most cases gives very deplorable results.
There are two main modifications of crowdfunding:
Experiments with this model were tested in 2008 in Radiohead's album "In Rainbows", when listeners could pay for an album any price they deem necessary, except for sales, this move was a very successful PR tool, and by the end of the year more than 3x were sold million copies of the album. Now this model is used not only online, but also applies when paying in catering chains, hotels and cinemas. One of the most famous online projects is the Humble Bundle.
When using SaaS services, it became possible to pay directly for consumed / reserved services, such as processor time, hard disk space, or service usage time. Cloud hosting is widely used (Amazon S3, Azure), as well as indirectly by various services (Megaplan, Mail Chimp)
Subscription // Monthly Payments
The model, with a monthly payment is quite common, is considered to be the Asian model of monetization, as it was often used in Korean online games. The basic principle is that in order to continue using the product, it is necessary to pay for it, while in the model with a regular subscription, all users pay for the service monthly.
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Examples of using:
- Task management systems, SaaS services
It is worth noting that most services currently use not just a subscription, but an extended subscription model, with a free trial period, and other modifications.
Virtues
- Works well with a quality service that you want to pay for.
- Small amount of payments (up to 300 rubles)
- Ability to unsubscribe
Problems
- Inability to use the service without payment
- In the absence of a trial period, not everyone is ready to pay for the service immediately.
Extended Subscription // Sell PRO Accounts // Freemium
Users get basic functionality for free, and pay for additional options.
Usually there is, along with the opportunity to use the service for free, while the subscribers of the subscription get some advantages over regular users, such as:
- Large amount of storage space / portfolio
- Unlimited lifetime
- Ability to quickly grow your account
- The ability to read articles, or reply to topics that are open only to Pro
- Separate technical support
Examples of using:
- Gmail, Dropbox, Free-lance, Skype
Advantages:
- Free use gives you the opportunity to familiarize yourself with the product to a large number of users.
Problems:
- Low level of paying users, usually 0.5-1%
- Many users can stay on the free version.
Single purchase of services // Delivery of physical goods
Purchase of services or goods, if necessary, these goods. The most standard way is used at the moment when the user needs this service, for example the opportunity to create a new project, buy minutes of conversation, order a t-shirt or sneakers from the online store.
The user can buy as one unit of goods, and a package of services, which includes a set of items, such as a mug in a gift box with delivery.
Examples of using
- Cellular operators, email distribution services
- Online shopping
Virtues
- The user buys exactly what he needs at this moment
- We can increase the number of different items in the store, and thus make it possible to buy individual services or products.
disadvantages
- There is a temptation to improve only what is sold, while spending less time on the development of everything else.
Selling virtual goods
In addition to the sale of real goods and services, you can sell virtual (hearts, dogs, badges), the main difference is that they do not provide real benefits, but give only status or decoration for a user account. Also, such products can be distributed as a promotion for the most active users.
Examples of using
- Social networks, games
Virtues
- Money is spent only on the creation of the first copy, all the rest are free for the company.
disadvantages
- Not applicable to business products
Receiving sales commission
This method is used by services by intermediaries, and consists in receiving a percentage from each sale of the main service. In general, can be divided into 2 large categories:
- Payment systems, and payment agents who receive a percentage of each sale
- Lead generators that get their percentage from attracted users
Examples of using
- PayOnline, DengiOnline, RoboKassa, WebMoney
- Sravni.ru, SkyScanner
Virtues
- No need to build customer service and service infrastructure
- There is already a formed market with high turnover.
disadvantages
- There are more and more intermediaries, and to work in this niche, you need to be a very high-quality service, with good sales professionals, and a low commission.
Media & Contextual Advertising
The most popular method, which is mentioned in almost all business plans, presentations, meetings, P & L models, and becomes the very magic wand that seems to save everyone.
The amount of income from an advertising article in all plans is usually equal to the amount that will cover all expenses, provide income, and the brand new handsome Mercedes to the creators, to the question why advertising revenues are now zero, the answer is unwind, and sell everything.
So, let's try to calculate how much a project can earn on media and contextual advertising.
For example, to earn $ 10,000 per month, you need:
- Display advertising, 300,000 impressions per day, and a good sales staff
- Adsense / Yandex.Direct, 700,000 per day
It is necessary to take into account the fact that display advertising itself is not for sale, and for its sale it is necessary to hire a sales specialist, or enter into an agreement with an agency who are interested only in large sites.
Examples of using
- Lenta.ru, Habr.ru, Rbc.ru
Virtues
- The main priority is placed on high-quality content and editorial policies, and not on things sold for money and on user’s limitations.
disadvantages
- Difficulty selling
- Not all segments are easy to sell advertising.
- Large areas of the site should be advertised.
Partnership programs
In fact, it is indirect advertising. The service receives money for the customers listed, and a percentage of the purchases of these customers. Revenue sharing is usually based on creating a partner interface, in which you can see how many clients are attracted, and how much income they brought.
Examples of using
- Amazon, Ozon
- Mamba, Loveplanet
Virtues
- In contrast to advertising, with an affiliate model, you can earn income even after a user is registered, many systems continue to pay a reward of up to 3 years from the moment of user registration
disadvantages
- Also, as in advertising for large incomes need a large audience.
- You give all your paying and active users to other services.
Offers / Payment for the collection of information
Many survey services, and audience measurements are ready to pay for user activities, such as filling out questionnaires, registering on sites and passing interactive surveys.
Examples of using
- Nielsen, TNS, PlanB media, AdLabs
Virtues
- Users remain on the service
disadvantages
- Distraction of users, littering of focus
Product placement
Often, product placement concepts are mixed with regular display advertising, but this is a slightly different niche, it has a different set of advertising media, and therefore even at times when the entire inventory of advertising placement is already sold, you can always find a place for product placement.
You also need to understand the difference when you advertise in the form of banners, users understand that this is just advertising, but if you are branding elements of your website or the application Adidas or Coca cola, the user will assume that the service is more strongly associated with the specified brand.
Examples of using
- Habr.ru, Kinopoisk.ru
Virtues
- Great price branding in relation to conventional advertising
disadvantages
- Service users find it hard to find standard controls
Payment for promotion services
“Lift your resume”, “Be the first in the top”, and others, they all exploit the same principle, the desire of a person to stand out, and become different from others. In our market, this type of monetization first appeared on services such as Mamba and Loveplanet.
It is clear to all that with the number of registrations of 100 or more per day, newly created accounts very quickly fall into the abyss, and new users, resumes, projects, and more constantly appear on top. You can of course try to rank these entities for other parameters different from the time of addition, but it is the ability to stay on top, or return to the top allowed to develop and grow the above services.
Examples of using
- Mamba.ru, LovePlanet.ru
Virtues
- Opportunity for old users to declare themselves or promote their projects
disadvantages
- Changing standard sorting, leading to search complexity
- Many services sharpen different ratings for this functionality too much, which impairs Usability.
Sale of virtual currency
In fact, this method is not a separate way to monetize, as it is only an intermediary between real money and the purchase of goods and services on the site. However, for many projects, it is a necessary step, because, in fact, you can start managing your money as soon as you bought virtual currency for them, even if the services themselves are provided much later.
Examples of using
- LinguaLeo, Online Games
Virtues
- Receive advances from users for future services
- Unused cash balances remain with the company
- The ability to establish a flexible pricing policy
- Quick purchase of services on the site, bypassing the stage of money transfer
disadvantages
- The user can accumulate the rest of the virtual currency, which can not be spent anywhere and it annoys
Conclusions and use of mixed monetization models
It is very important at the first stages before starting the service to think over what you are going to earn, you should not expect that you first take over the world, and then happiness will come, usually everything ends prosaic, the world is not captured yet, and the money from the creators has already ended.
It is possible and necessary to use mixed models of monetization such as, subscription + provision of one-time services + advertising, and so on. As the project lives, you need to change the business model, try different ways, look for those that will work better for you.
UPD1: Crowdfunding Model
Used in Wikipedia for the annual collection of funds for the development of the project, has also been and remains popular with many blogs and communities in which direct monetization is impossible.
Payment systems such as Yandex.Money, WebMoney and Robokassa offer special buttons for automatic fundraising in favor of the project, but their practical application in most cases gives very deplorable results.
There are two main modifications of crowdfunding:
- Raising money before launching a project, on sites like Kickstarter
- Community request to help already on a working site
Virtues
- Quick registration and installation on the site
- Does not interfere with users as advertising, and does not interfere with the growth rate of the project audience, as it does this subscription
disadvantages
- Most sites do not have such a large number of fans to fully cover operating expenses due to crowdfunding.
- There is a certain similarity with begging, which does not cause positive emotions among the audience.
UPD2: Pay as much as you want model
Experiments with this model were tested in 2008 in Radiohead's album "In Rainbows", when listeners could pay for an album any price they deem necessary, except for sales, this move was a very successful PR tool, and by the end of the year more than 3x were sold million copies of the album. Now this model is used not only online, but also applies when paying in catering chains, hotels and cinemas. One of the most famous online projects is the Humble Bundle.
UPD3: Model Payment for used / reserved resources
When using SaaS services, it became possible to pay directly for consumed / reserved services, such as processor time, hard disk space, or service usage time. Cloud hosting is widely used (Amazon S3, Azure), as well as indirectly by various services (Megaplan, Mail Chimp)
Source: https://habr.com/ru/post/158951/
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