Ah, advertising. The bane of everyone’s existence, even those who create it. New businesses hesitate to turn away users by charging for content or services online, so getting the eyeballs becomes the big draw–in order to draw the ad dollars. If you build it, they might not come, but if they do come–you can make money. Lots of it. Right?
Maybe not. A recent GeekWire post dissected the fallacy of advertising, focusing on how VCs invest $2 for every $1 of advertising opportunity. The post proposes instead a knowledge-based foundation for online success, encompassing lead management, monetizing through micro-transactions (whew, let’s call this what it is: buying stuff!), and consumerizing the enterprise. The ultimate conclusion is that people will pay for content and information, even realized as market research.
This may be true, but it misses another critical avenue for monetization: experience. Online information and content are great, but it’s impossible for them to completely replace real-life experiences. People may pay $7.99 a month for Netflix, but they’ll $10 to see a movie in a theatre. They may pay $9.99 for an album on iTunes, but $200 for a three-day festival pass. Real, tangible, one-time experiences often win out over the virtual, anytime experience, at least in terms of price points (though real-life events are, of course, accompanied by additional costs).
Online, there are constant Twitter chats and event livestreams. I can download the slide decks from almost any major conference anytime. I can get the information. But does it replace being there? Likely not.
Not every company can create an in-person arm to its online operations. But doing so can lend a new sense of community and a bit of cash to the operation. It’s worth considering–if not as a primary monetization strategy, as a compelling alternative to advertising.
Public domain image sourced from CastleKay