CPM: 1. Cost for 1000 impressions or pageviews. It is for banner/display ads shown on web pages. 2. Cost depends on a. size of banner b. placement of banner. E.g. Homepage banner ads will have a premium cost. c. Type of banner e.g. rich media/flash banners cost a premium
CPC: Cost per ad clicked.
Pop up / Pop under ads: These are ads seen generally on rediff.com and sify.com. The ad pops up in a new widow , once the page is loaded.
Mailers: Promotional mailers sent to users.
Product Integrated ads: These are ad formats which requires integration with the product .E.g. skinning of music player , creating stop-pages ,etc. Cost depends on duration for which ad is displayed and the development cost.
CPL: Cost per lead . Cost depends on the number of fields users have to fill in .E.g. Name . address, mail-id ,etc.
Video ads : These are ads displayed while viewing videos .It can be pre –roll , post-roll ,etc.
Other factors that impacts ad rates are: 1. Popularity of website 2. Right fit i.e. if targeted users visit the website.
Revenue model of desktop explorers: 1. Opera: On desktop, Opera collects revenue in several different ways: 1. Search partners The Opera Browser features integrated search and shopping bars, and partner companies pay a fee to Opera every time a user utilizes the integrated search or shopping bar. Opera cooperates with a few select partners it feels can contribute value to its product and users. Deals with companies like Google, Fast, Lycos, InfoSeek, Yahoo, Amazon, and eBay are showing constant growth in revenues for Opera. 2. Rendering engine as a separate product Opera delivers a full-featured, embeddable version of its desktop browser that can be integrated into a wide range of applications. Adobe and Macromedia are important partners in this segment. 3. Opera Web Mail Opera provides a free and a pay service Webmail. When users pay for the premium service, Opera splits the revenue with Outblaze, the company that operates the service. Reference: http://www.opera.com/company/investors/faq/#faq3
2. Mozilla Firefox:
1. Mozilla has published its audited financial statements from 2008, reporting $78.6 million in revenue for the fiscal year—a five percent increase from 2007.
2. Most of Mozilla's revenue is generated through search deals with Google and other popular website operators like Yahoo, Amazon, eBay, and others. Mozilla receives a kickback for integrating search services from these companies into the Firefox Web browser. Mozilla also generates revenue from investments and donations that are made by individuals to the foundation. As of November 2009 the daily number of Mozilla users has grown to 110 million, bringing the total number of users to approximately 330 million people. As of November, 2009 Firefox’s market share worldwide reached 25%. http://blog.lizardwrangler.com/2009/11/19/state-of-mozilla-and-2008/
3. Google Chrome: Revenue = Amount of Time on the Web Every second you’re playing a desktop game, using Microsoft Office, or using AOL Instant Messenger, that’s unrealized potential revenue. The equation may be obvious, but that doesn’t diminish its importance. Its product releases are a clear indication of this trend. Nearly every Google product is designed to get you on the web. Gmail is integrated with Gtalk online, Google Docs exists in the cloud, and most of all, Google Chrome is designed to get the world to rely on web-based applications more Google built Chrome: for faster load times, for increased use of web apps by users, and freeing up user time so they can browse the web more. Each and every one of those improvements means increased time on the web, which, if you remember the Google Revenue Equation, means more money. http://mashable.com/2009/07/11/google-equation/
4. Revenue Model of IE: IE generates revenue from following Partner programs: a. IE Partner Opportunities: Build brand awareness and promote your products and services by using the special features of Internet Explorer. b. IE Add-On Gallery c. Partner Logo Program d. IE Partner Marketing toolkit.
E-Commerce is still a very difficult business to crack. Many digital companies are still struggling to find one product that turns out to be a silver bullet for their business.
I had a small stint working on digital music e-commerce website. It was a subscription based model, where user pays one time fee for a monthly subscription for unlimited download.
Some of my learning’s:
1. Give what they want:
It is worrisome to see users not finding value in your website, when you have the best and the latest bollywood content. It looked obvious to us that latest bollywood content could woo users to pay for the service. But numbers had something different to say.
Highest content download for more than a month was a bhajan – “Hanuman Chalisa” followed by “Chiggi Wiggi” from Blue. Also many users were downloading regional songs such as Haryanvi, Tamil and Punjabi.
Rs.50 is all it takes to buy a pirated CD of latest songs from bollywood and if you have enough time on hand with a decent broadband speed, just need to visit websites like cooltoad.com and likes to download all the latest songs. So why pay for these songs?
Learning:
Obvious can be catastrophic: We thought that the driver for our website will be latest Hindi songs, but it’s not the case. Users ask for regional content and download substantial amount of non-bollywood genres as well.
So, observe what your users are doing. Sell them what they want and not what you think is best for them.
Create a niche: E-commerce does not necessarily require huge volumes to survive, unlike ad driven websites. Hence, it’s easy to survive and thrive by targeting a niche segment.
For instance, a website that sells only bhajans might make decent money and have niche audience that come with a pre-set mindset, which is to download bhajans.
2. Make it instant:
Design your homepage to display as much content from your collection as possible. Do not make users search for content. They will not!
On a music e-commerce website users make an instant decision to download content. They generally won’t search and browse before downloading. Hence, don’t be surprised to find lesser page-views per user. It’s not a metric to consider when tracking the performance of your website.
3. Platform independent:
Another user feedback was that a lot of users wanted to listen to their songs on the mobile .Our DRM rights prevented them to do so, which users’ complaint about.
Learning:
So make your content platform agnostic. If possible make your content transferable to music players as well.
4. Its not how much, its how good:
Don’t get carried away with the size of your content library. It’s good to have a huge content library, but only if your users ask for it and users download it.
We had more than 60k content pieces but each month had only 8k audio pieces downloaded. Also majority of the songs downloaded belonged to three / four genres and languages.
Learning:
Ask users what they want and get that content for them. This will save cost and efforts of getting content for your website.
Especially if your website is targeting a niche it’s much easier to identify the content that you should upload. However, in case of a generic music e-commerce site this can be quite a challenge.
5. Track regularly
E-Commerce website for music needs to be updated with content as often as possible. Hence it becomes imperative to track the performance of the website , in terms of number of downloads , downloads per genre , downloads per language on a continuous basis, preferably weekly.
6. Inform regularly:
Weekly mailer is best way to inform users on latest content uploaded. Unlike social networking sites, users have less reason to visit your website on a daily basis. Hence, keep them informed to generate repeat traffic to your website.
The blog highlights some of my learning’s of internet business. Though there might be exceptions, however, I believe that for most of the internet businesses, the following holds good.
Copy!
Copying is wrong. Who says!
Check out the social networking sites, portals, entertainment website, et al. How different are they?
A website gets funded and the very next day there is a slew of similar if not same websites. A top ranked website adds a feature and all the remaining, starting from no.2 onwards start copying the same.
Well, without adding any value judgment to “Copying”, let’s face it, it’s inevitable and it’s really not a bad thing to do, if it helps you to remain afloat.
So do copy.
Be quick
A stimulus to above point is to “be quick”.
Be quick to:
1. Innovate product
2. Market product
3. Grow members / users
4. Approach VCs
5. Copy (if need be)
6. Recruit team
7. Grow revenue
And anything else related to your business, if I missed in the above points
That’s the nature of e-business. To survive you need to be quick.
Try innovations, test them, get feedback, scrap if it doesn’t works and make a big noise if it does. It’s the only mantra to survive in such a dynamic business lest you will perish otherwise.
Take it Or leave it
Be harsh to your users, if need be. A lot many times users end up using the website for purpose other than what the website is meant for.
For instance, a lot of social networking websites end up being used for online dating instead of connecting friends, sharing content, et al for which the website was meant to be.
The only way to retain the value of your website is to prevent users from doing things other than for which the website is meant for. Example: Adding privacy feature on social networking sites creates a barrier to frivolous users who come to the website with the intention of dating.
Give Little and then Little More:
Always add features to your website one at a time .Then promote the feature on your site and give some time for users to explore and get used to it. Analyze usage of the features.
Scrap it if it’s not well taken by the users, else, if users like the feature, work on it to make it better.
This gives a lot of focus to the product team. It’s also better than coming out with new features at a breakneck speed, which leaves users lost and the product team discouraged if features don’t work. Small successes with little failures help increase morale of the team, keep users happy and saves cost.
Keep focus:
With strong analytics, one can gather all information required about the website.
Number of visitors, number of downloads, exit rate, bounce rate, etc. Addition of features increases the numbers you need to track regularly.
So what’s important for you?
Is it time spent? Is it page views? Is it visits?
The answer is “depends”
So even though for a website that depends on ads for revenue, the number of page views, visits and time spent is important, for an e-commerce website number page views might not be an important metric. Similarly for a search engine (such as google) time spent by the user on each visit, is not important.
So, it’s very important to know the metrics that are important for your business.
More is not merrier:
Websites that have ads as a revenue model, end up pestering users by making them land on a new page, each time a user wants to access a feature.
Suggest designing the website such that users can access the product features without much clicking. Building widgets, customizable pages – where user can select features he wants to use; relieves users of innumerable clicking.
