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But what with Yahoo, & MSN in the near future, both entering the contextual ad market, is online publishing that relies on contextual advertising now a truly valid & sustainable business model?
[edited by: roitracker at 8:16 pm (utc) on Nov. 22, 2005]
If you were to rely on contextual ad revenue as your primary business model online, at what point would you choose to become a full-time publisher over your current job?
In fact, it works so well that other big and small players are fighting their way into the business and thousands of small (legitimate and otherwise) publishers are doing the same.
The last figure I read was that Google had about 200,000 advertisers in its program. As geotargeting and other hair-splitting becomes more sophisticated the number of local, national and global advertisers will only expand. Google will not have the market to itself and a publisher with a good product will always have options.
No advertising-supported business is completely stable but those that build a successful franchise can be quite profitable, at least some of the time.
I would suggest the question might be -- can you use contextual advertising as part of a long-term strategy to build a media business on the Web? The answer is clearly yes. As the business grows, it will be able to expand into CPM advertising as well as other models that are still developing.
It's not a perfect system but it's a perfect way to get into the business in a small way and grow as fast as your energy, ability and cash flow permit. It is, on the other hand, not usually possible to do that by relying on CPM or affiliate advertising, as both require large circulation to produce even modest revenue.
>>"I thought the question was whether a sustainable business could be built around contextual advertising, not limited to AdSense."
Too late to edit my last entry, but yes, the question refers to contextual advertising in general & is not limited to AdSense.
Are you trying to get us to convince your wife that it's ok that you quit your job? ;)
Are you trying to get us to convince your wife that it's ok that you quit your job?
For what purpose you posed such a restrictive question, I'd like to know.
- although AdSense is currently the main source of income for many, that doesn't necessarily mean it's a long-term, sustainable business for online publishers. So, I was wondering how sustainable real publishers think contextual ad revenue is & whether it is seen as a reliable business model (in the long-term). There's too much noise in many of the AS threads to get a clear answer to this question.
- too many threads end up in a MFA debate. From the perspective of a "real" publisher, their contribution would probably be irrelevant to this discussion (unless they also operated a content site).
- diversification is always good, but there are plenty threads about diversifying already so I wanted to focus solely on contextual ad revenue as a business model for publishers.
Turned out a good thread IMHO. :)
I can't say for myself as illnesses have eaten away at the last few years but my son has had so much web success that I have to say, yes, it is.
First, about 1993 or 4 he built a website based on widgets he knew a lot about and decided to sell his knowledge. This was back in the days before he had a merchant account and working long hours as a _____manager.
His success was so great (due to long hard hours) that he decided to get a merchant account and by pass pay-pal, that soon led to serious consideration of quitting his well paying job. All other friends and family (including wife) said to keep his job for security reasons. I told him it was time to go for it as his business needed the same attention he would have given to a brick and mortar model. Undivided attention needed to be paid to make this continue to work. Since it was his dream, then it was just what he needed to hear to tip the scales.
From quitting the job he investigated many ways to earn on the web, soon deciding to sell ads on the site; that worked well, then went to ad server companies and the rest, numerous websites, Hard, hard work, and a fantastic income and lifestyle is history, so to speak. He never looks back, only ahead.
Soooo, sustainable? Yes, but only if you are willing to put in the effort to make it so.
Valid, yes. Sustainable, still hangs in the air
Do You know a business modell, which is sustainable?
All the car industry is based on oil.
The oil consultant of president Bush predicts $250 / barrel in the next 10 years.
Has the car industry done something to escape the dependancy of oil?
Not sustainable! And this is one of the biggest industries.
Anyway as I said recently I've been doing this for 6 years (contextual advertising, direct advertising and affiliate programs), and I've averaged about twice what I used to make as a project leader type. At this point I really don't care if it's sustainable. It's been a great adventure and it was the right thing to do. Even if it collapses tomorrow, that's 6 years of my life I didn't have to spend in a cubicle.
About one year I was completely dependant on Adsense.
I was trying to optimize, get more traffic, reoptimize
and so on. It worked some time but sometime I saw a huge drops in earnings.
But that was good year because I learned a lot.
After AS income dropped again - finally I started to look at another sources of monetizing my traffic,
other niches, other subjects.
Now my AS income is just only 25%. And I'm sooo happy.
Last few days were terrible with respect of EPC.
So what now - I still relaxed and doing my job further.
New sites, new programs (like chitika for instance, inspite of big changes they have made last week).
My brother has couple auto related sites and he found out he can even SELL sports cars over internet. I would never thought about this possibility.
Diversify, diversify and more diversify your business and everything will be as you will build it.
Remember Futurama: "You gonna do what you gonna do"
Good luck to everyone.
My words on a weekly basis to my spouse, exactly. If the bubble bursts today, we at least always had this, and the memory of it forever more.
Right now, this... is beyond our wildest dreams. We arrived 5 days ago on the beach, and are working on or near the balcony where I can throw a rock to the sand. The view is awesome. Yesterday we watch a dolphin play. The day before we watched the Stormy Seas harvest shrimp so close we could see their faces. We have everything we need under one roof, fitness room, arcade, two pools, two spas, two saunas, business center, high speed internet, maid service and more entertainment within a few miles than we have ever had in our life.
We are so thrilled that Adsense enabled us do take this year long vacation, traveling the country and discovering this place. Thank you Adsense! I worked hundreds of 7 day weeks, 18-20 hour days to get us here, but it was worth my effort. Without Adsense, I would have been working those hours much longer to achieve the same level of revenue success.
Even at that, at least I was working for myself, and was able to give my spouse a job, pulling him from the work force as well. There is not a day we are not thankful it has all worked out. We don't worry about whether or not Adsense is sustainable. We build on Adsense, hope for the best, and we build on other revenue programs to diversify.
We try to predict the future, not just react to it, and that requires vision. When we do have to react to it, we use creative thinking to resolve the situation. I don't build our life with a hammer, I build it with stepping stones, each one carefully placed .
Working builds a future. Worrying prevents a future worth living.
And traffic is critical. A great site with little traffic can easily be out performed by a trash site with tons of traffic.
The view is awesome. Yesterday we watch a dolphin play. The day before we watched the Stormy Seas harvest shrimp so close we could see their faces. We have everything we need under one roof, fitness room, arcade, two pools, two spas, two saunas, business center, high speed internet, maid service and more entertainment within a few miles than we have ever had in our life.
Bite me! lol jk
To answer part 2, I would say that for everybody it would be a different $$$ amount. However as a logic formula I have made up for myself:
If ((avg monthly earnings for last 12 months) > (monthly cost of living + Extra)) AND (savings > (6 * monthly cost of living)) then
'QUIT JOB HERE
'KEEP WORKING AND WRITE NEW CONTENT SLACKER!