Ask Slashdot: How can Free Web Service Recoup Costs? 77
Trixter
asks this question, which might be helpful to any of you
out there that might be looking to do something similar:
"I'm planning a huge, free, online resource,
and am just looking for a way to recoup any operating costs;
I'm providing the server out of my own pocket, but would
like advertising to pay for the bandwidth each month, with
any additional profits going into upgrading the server
hardware and bandwidth, ad infinitum. Just how do
you make money on the web with a free service?"
www.freeserve.co.uk (Score:1)
freeserve has only been going ~4 months but already has nearly 1m customers. impressive, but as i have just discovered, impossible to connect to and has nasty net-cache's in operation etc.
i suspect that a free ISP in the US would be unviable as you folks have free local calls and thus a free ISP couldn't take a cut of the call charges.
i for one would like to see a high-bandwidth ISP. i think there would be a big market for home users who want real fast dial-up connection, particuarly for network games.
CH
Honest Advertising, please! (Score:1)
Every time I hear the add I cringe. I finally sent a message to the admin and asked if they actually understood the history of the internet/web. He reported that yeah they knew the truth, but this sales approach was working so they weren't going to change.
I hate revisionist history for the sake of making money!!!
Web Space (Score:1)
There are still many companies who are not on the net and need someone to walk through the door and sell them on the idea. Take it from an internet business strategist, you will recoup your costs and if your good make a profit. Hey, you never know, you might even quit your job and work for yourself full time. Good luck!
There are only 3 ways to make money off a web site (Score:1)
Sell advertising (this includes things like sponsorships, dedicated promotional pages, banner ads, etc.)
Sell products
Now there's no reason a free site can't sell products as well. As a matter of fact, providing content for a target audience for a vendor can be a highly successful marriage. You provide the traffic; the vendor provides the targeted products. (Since you didn't mention it, I don't know who you target audience is.)
You will need to get your site up and invest in the initial launch before you can take your marketing & business plan to potential vendors (your target audience must be interested in buying *some* kind of product). You should also have figured out how you intend to handle orders, etc. A drop-ship arrangement would be best in your case. Take a look at garden.com. It's a commercial site, but they handle internal cross-promotion well.
And no, I'm not in the marketing department (but I did grow up in advertising and broadcasting...).
Duh... (Score:1)
Hmmm... using your "$0.003/impression" figure and Rob's statement that he got 410,000 hits on Tuesday, that means slashdot probably raked in $1230 that one day. Not bad...
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synaptik
Classifieds. (Score:1)
Nielson predicts that classifieds are going to turn out well. Hmm. With a Web-forms interface, they'd end up being like commercial-sites-only search engines. Could work.
Duh... (Score:1)
Most sites sell like 30% of their ads.
re: Advertising (Score:1)
If you were getting 12000 page views per day (with mostly, although not necessarily 100% unique users), then you'd be in a real jumping off position.
But 12000 unique users a month is only 400 per day, which is usually too little for a company that might advertise to waste time doing paperwork with.
Money for your site (Score:1)
Take a look at www.eads.com They offer you money per click.
www.freeserve.co.uk (Score:1)
I was in Ireland awhile back and freeserve was being announced. The reason for their free service was the prohibitive costs of telephone service in the UK. At least one person I talked to said he was paying 300+ pounds to his telco for monthly connect charges to the Internet. This at the time came to @ $480 US!!
Hypermart (Score:1)
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Tips (Score:1)
Watermarks, popup windows are all bullshit!
just like the yahoo email that signatures all your stuff if you use them. I think that you need to make concessions if you are getting something for free, but its getting ridiculous.
Its all in the browser. (Score:1)
But for how long...? (Score:1)
"Telephone charges could rise and free Internet services could be scrapped in the wake of sweeping reforms by Oftel expecting next month."
Basically, BT are whinging that they can't cope with the demand of 900,000 FreeServe users, especially since they only get 30% of the call charges for it (Energis get the other 70%).
Well, my heart is bleeding for BT. They make money almost as quickly as BillG and their product isn't any better, so they can shove it up their corporate whatnots as far as I'm concerned.
get members (Score:1)
History - (Score:2)
It started has a student project and bandwith was supplied by the Uni - then the Uni said no more so it went with a commercila provider with a large announce
Then Sun gave a machine and users gave disk and other hardware to support the site. It was not enough so the guy running the machine (which give free space for 30000 users) had a great idea.If you wanted stats for your web then you had to add a cgi script that would show a ad banner
So you should
Ludo
Advertisers don't come running... (Score:2)
I think the main thing that people are forgetting when they suggest advertisements is that people don't advertise on a page that has no hits- and without a page that has already been online you don't have the hits. Classic chicken and egg problem- you don't have a site without the money to start it and you don't have money without the site to generate the hits. I agree with the person who suggested a small business loan. Get the site started. Then get advertisers to get it up to profitable.
Then again there is the web cam.....
Sell space at $1/Meg/year (Score:1)
I think selling disk space with free server access is a good tactic. I'd go for it.
arsdigita and photo.net (Score:1)
run a significant free service and show how well
you can make it work, and you can charge big bucks
for web site consulting.
Porn (Score:1)
Pay-for-porn sites get worse day by day. Don't bother with them.
No, actually, don't (Score:1)
Quote:
Print, TV, radio, and the web are all different mediums and they all have very different advertising models.
True. Up to a point. However, there is one commonality to all your examples: you can find them for free. There is free print, free TV (okay, lets not get into the cable issue!..), free radio and free web sites. Yes, their models are different, and there is where most people seem to stumble when it comes to Web-based enterprise: there is no/few reliable models, so they freeze like a deer in the headlights. Instead, business people should learn from BOTH the differences and the similarities.
But I wasn't saying that the Web is print, anyway. I was saying that the lessons learned from traditional media (including radio, etc.) are valuable resources for any business person looking to give something away for free -- I used print media as an example simply because it is what I do for a living.
You are so right about local advertisers prefering local papers; however, the same works in reverse, in that a small paper can not easily secure national advertisers because our demographic is so specialized. Both are good examples of problems a Web site can come up against or answer as well.
I apologize if I wasn't clear about my point in the first post. However, as different as the two industries are, it seems (as I have a foot in both coffins, I guess you could say...) that they also have significant issues in common. My arguement is that rather than throwing out the baby with the bath water and starting with an empty tub, look at the resources already at hand. Business tactics are tactics, plain and simple, and have only been modified to fit different industries as needed.
It is also worth pointing out that while click-through counts have gone down over the years, brand recognition has gone up. Another similarity Web sites have with print media is that we sell advertising based on the idea of "getting your businesses name out there." No more, no less.
I'll be sure to check out Nielson's essay. Thanks for the pointer....Pax.....
Look at traditional media (Score:2)
Well well well, an Ask
I work for a "free" newspaper for a good sized city in Florida. "Free" is only applicable to our business in terms of what our consumers think...they can pick up the paper and read it without paying for it, so we offer a service -- providing content for readers to enjoy -- for free. (okay, it could be service or it could be a product...but you get my point)
However, the paper itself is not free. On top of my salary (the most important check cut here, I do believe!), there is the salary of six other employees and the very expensive printing costs. The company itself does over $1 million a year -- not huge, but respectable for a small business. And every penny of our operating budget is paid for by our advertisers.
The lesson here is that advertising CAN support a "free service." I'm not going to blanket this example to cover Web services (there are plenty of horror stories out there), but just because an media is new does not mean it is not effective. What you need is a business loan to start with and a couple of reputable sales people on your staff. Then start talking numbers -- do research into recent studies concerning people's online habits, do marketing samples, do it all.
If this paper had just started printing one day with the hopes that advertisers would see how great we are and then pay us for ad space, it would have folded in a week. A lot of market research went into this, plus a fair number of financial backers. The upshot: the paper is free, and my paycheck clears the bank.
I think many people involved in the Web/Internet industry are too swift in disregarding the business lessons of the past. Stop thinking in terms of "new, unknown, untrusted high-tech commodity" and all the economic mystery that goes with that vision and go back to square one: it's just a service you are providing. Someone has to pay for it. Period. Look around you at any -- ANY -- company in your town providing a free service, and analyze how they do it without folding.
And then go from there! Good luck.....Pax....
bad idea - I agree (Score:1)
Freeserve is pretty good (Score:1)
I now use Freeserve as my main ISP - I do have another free account as backup, plus a work account if necessary, but I wouldn't mind using just Freeserve and the free account.
The key thing with free ISPs is to always use something like www.bigfoot.com or www.pobox.com to redirect from a stable email address to the free address - that way if Freeserve does go down the toilet you can just redirect your mail somewhere else.
In fact, given how crap many paid-for ISPs are, a bigfoot-style (or domain) address is not a bad idea anyway...
www.freeserve.co.uk (Score:1)
Anyone done it ?
That's A Good Question (Score:1)
Re: those pop up windows are easy to get rid of (Score:1)
No I have a far better way. I use @Guard; it removes, at the TCP/IP level, ALL popup windows, banner ads and cookies; learns about new ones, doesn't provide a blanket approach (i.e. Accept all cookies/Reject all cookies is just too general, what of you want some then youre stuffed because you've got to accept all of them). The learn feature is dead useful; what's that, an advert? well let;s find a unique string that's part of the advert and tell it to block every HTML item containing that string. Bye-bye advert.
Okay it doesn't block that stupid geoshitties watermark (yet) but I haven't seen a geo or tripod popup for months now. Or any banner ads, except for when I have to reinstall Windows because it has become unmanageably unstable yet again (about once every 6-10 weeks for WinNT).
This is one bit of shareware that improves my online experience so much I'm even considering registering it!!!!!!
re: Advertising (Score:1)
Raising Money for my Website (Score:1)
not for me, since I'm already investing a lot,
and I'm fine with that, but I simply can't afford
to invest any more, and my service is very slow.
You will see that it is a classical MP3 service,
and I have asked some of these online CD stores
with ad deals if they would consider hosting the
site or something, and they have been...less than
responsive. I mean, I just don't believe I will
find a lot of advertisers wanting to be on an MP3
site (I definately try to distinguish myself from
the average k-lame mp3 sites with the porn ads and
popular music). My biggest problem is I need
more bandwidth, I'm running off a 256k dsl line,
which causes many complaints about speed, user
limits, etc. Does anyone have any suggestions?
Free 'Net Access in the UK: The Figures Explained. (Score:1)
There's no "deal with the telco". The telco (Energis in this case) _own_ the ISP (Planet Online).
And there's nothing new about getting paid money for calls made to 0845 numbers. Anyone who gets themselves a telco licence and who achieves interconnect status with BT can go ahead and invest in lines, a switch, etc. and collect call revenue from BT on calls made by BT customers to those numbers.
The amount received by the telco which owns the numbers are: 0.3155 pence per minute at weekends, 0.7333 pence per minute during weekday, off peak and something like 2 pence per minute during weekday peak times.
I ran a trial of this type of service when I was working for a "new" telco, back in November '97. It was a very successful trial and the idea got adopted in a different form - basically, the telco said to ISPs "We'll carry your call traffic, provide the lines, modems and bandwidth and pay you for the privilege".
This is why big ISPs are worth so much money, even though they have never generated a profit - they get snapped up by telcos like Scottish Telecom and Energis, who then start reaping in tens of thousands of pounds a _day_ in call revenue.
I know this, because I was involved in ultimately unsuccessful negotiations to buy one of the big UK ISPs, and I had the job of figuring out how to get them on the telco's network and how much call revenue would be generated. My calculations came out with over £50,000 per day. And that was being kind of conservative.
I used to laugh at stories a few years ago which said that the Internet was threatening telcos, with voice over IP and so on, because I knew about this whole call revenue thing, and I knew that telcos have barrel-loads of money to spend on acquisitions, whereas your average ISP is lucky if it's managing to break even.
The telcos were always going to end up buying out the ISPs. Either that, of the ISPs were going to become telcos - eg. Easynet. It's only now that people are beginning to realise why.
The Dodger
Targeted Ads (Score:1)
For instance, right now I'm looking at a VA Research ad. I've already seen it, and I've already clicked on it. I'm unlikely to click on it again unless I'm in the mood to find out what VA's latest offerings are. I might click on the VA ad once a month to check up on things, but as a regular user of Slashdot, I probably see it about four times a day. So four times a day x 30 days = 120 impressions. One click / 120 impressions is less than 1% clickthrough.
Now, if I purchase one Linux computer a year, and the ad combined with VA's web page convinces me to buy a VA computer for $ 2,500 that they make $200 profit on, I've made them $ 200 a year. If the ad cost them $ 0.01 per impression (ads are more expensive when they're on targeted sites), they spent $ 1.20 to get their $ 200 profit. If 1% of Slashdot users buy a Linux computer because of their ads, and the average user gets about $ 1.20 a year worth of advertising, then it costs them about $ 120 per sale.
Anyone know how that compares to conventional advertising for computers, say on TV or in magazines?
D
Need mucho impressions (Score:1)
Not sure what net means - probably 1,000 unique viewers, not 1,000 page views.
D
Advertising (Score:2)
The following approach should work, but requires venture captial.
If your service isn't up and running, it is the advertisers who control how much they pay you for the banner ads. OTOH, if the service has a solid customer base, you can ask for whatever you want (within reason). Best of luck.
I think.... (Score:1)
M
You don't need advertising.. you need SPONSORS! (Score:1)
UK charges (Score:1)
Of course, when the phone bills come in, most of the Freeserve customers will probably give it up, or greatly cut down their use. Remember the chatline fiascos 8 or 10 years ago?
Look at traditional media (Score:1)
Most free paper advertising is like a bulletin board sent to your home. John Does advertises his car for sale, and people looking for a car scan the paper. In many cases these papers have no editorial, and are purely classified adverts.
This is very focused advertising (a kind of dynamic yellow pages), and generally very localised. How can you translate that to the Internet, which thrives on broad coverage? How can you get a surplus from it to finance your other non-paying Internet activities? I don't say its impossible, but the attempts I have seen to do this so far have failed.
Duh... (Score:1)
re: Advertising (Score:1)
Need mucho impressions (Score:1)
bingo (Score:1)
Trying to support an online venture through advertising _only_ is extrememely difficult (the only people I can think of who make a profit at it are Yahoo. Excite, CNet, et al, don't make any money).
Be curious to see
=moJ
- - - - - -
Member in Good Standing,
Statistics Companies (Score:1)
Make money (Score:1)
Of course, diversify.
Investors that don't know any better... (Score:1)
-=Julian=- [julianhaight.com]
The Economics of a service website. (Score:1)
not 'making money'.
Need mucho impressions (Score:2)
We offer cash prizes and t-shirts to the weekly winners during the football season. Our revenue is solely based from advertisers and sponsors.
We use Flycast [flycast.com] for our banner advertising. We were getting around $3.50 net CPM from them during the season for doing very little work on our part. We also had weekly sponsors that paid up to be included in our weekly emails and to have an ad on *every* page.
I suggest you create the site with advertising holes in place, and then hunt down your advertisers/sponsors. This takes a lot of energy, make sure you have someone who has done cold calls before doing this.
Also, gainging page views is best done by swapping a portion of your advertising with a partnering site.
Good Luck.
-Don Drake
Free (Almost) Services (Score:1)
Haven't read too much of the comments, but I would suggest 1. Sponsors, 2. Donations by the users (both money and/or support of systems.
After building a decent sized ISP (2 DS3's) during the past 4 years I'm ready to move on, but would love to have a place I can hang out and help support "over the wire".
Non-profit Corporation (Score:1)
You would need a Board of Directors. States vary of the requirements. Your state's Secretary of State website might have materials you can download. Your State's statute might be on-line and it usually very clear (once you get used to the writing style) about the requirements.
There are on-line organizations that will help non-profits.
There are special IRS requirements for non-profits. You must file all the paperwork associated with having employees.
If you have three committed people, a couple months, and a couple thousand dollars in seed money, to hire a lawyer, you could get rolling.
Non-profits cover costs, pay salaries, etc. so it is quite possible to make a living, assuming you can get donations or grants. Also, as a 501(c)(3) you can receive donations of equipment, software, etc.
There are many complex issues with this approach and I wouldn't recommend it for the faint hearted or for a whimsical idea. However, it does avoid the pesky commercial alternatives.