Comments on: Trends in Pricing

By: Don Jones

Don Jones — Fri, 16 Mar 2007 00:04:36 +0000

I run a venture capital database and I offer a free part of the site that I include only relevant advertising (when I can get it) and a subscription after free trial period for those who want to be able to search the high end database. My experience is that people generally will convert to a paid subscription quickly, once they’ve signed up for a free trial – very rare to see them wait until the end of the 14 days.

I deliberately don’t include ads on the paid-subscription section, not only because people are paying for the access, but because it is distracting for what they’re doing – analyzing financial information. So far, no complaints from people who want interruption advertising…

By: Martin Edic

Martin Edic — Thu, 15 Mar 2007 21:21:26 +0000

(please note- there is a positive suggestion for a revenue model at the end of this post!)
The problem with ads on applications is lack of relevance and failure to address intent. As an advertiser I want ads served up in places where the context is extremely relevant and where my target audience has shown intent based on what they searched or where they are. Google has millions of eyeballs on Gmail and virtually no revenue because they serve up ads based on incoming email content which is not very relevant to the interest of the reader.
In the online media and advertising world that I live in, in my day job, we’re not interested in paying for millions of low performing ads that are served based on traffic alone. We want measurable results and so far there is no evidence of ads served on application sites delivering results.
Want to monetize Teqlo? Partner with the services you’re putting into the mix as an affiliate. If you mash up travel services with mapping go to rental car agencies and offer them qualified leads based on the traffic they will get from the services linked together with the app. Share those revenues with the users who build the apps. This model addresses an end-user’s needs (find rental car drop-off sites near my hotel) by providing a relevant service and compensates those who use your free version to create cool, useful things.

By: scotty

scotty — Thu, 15 Mar 2007 09:09:24 +0000

You can have both advertising and premium together, provided that the advertising you provide to your premium customers is adding value.

Regardless of whether you are using both or not, I don’t think you will see high revenue from advertising unless it is adding value.

I’m looking to implement this in a future product of mine, as I actually enjoy seeing a relevant, valuable ad at the top of my gmail or on another few sites I visit.

By: fewquid

fewquid — Thu, 15 Mar 2007 06:18:04 +0000

Jeff,

Great post. I’ve been giving a lot of thought to this myself lately. I think you may be right that the reality is one model or the other, but not both, at least not initially.

Plus it seems to me that the ever increasing number of ad-driven businesses will have to drive down the potential revenues to be had.

I’ve yet to see any really good studies on web pricing — it’s about time someone did that…