June 19, 2013
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The Argument Against a “Free” (Ad Sponsored) Xanga
A big point of contention with many current Xangan’s is that Xanga 2.0 is slated to be a “pay-only” blogging site, with free (advertiser sponsored) blogging no longer available.
So the new version will include all Xangans as members, but non paying members will only be able to sub and comment to blogs.
The main reason that has been put forth for this change is that the model of ad generated revenue for internet sites is unsustainable- that it will eventually fail in the long run due to increasing costs of the site and decreasing ad revenue.
So then is this the case? Is the ad sponsored revenue model destined to fail?
Let’s look at the facts:
The ad revenue model is employed by all major communication mediums:
1) Radio
2) TV
3) Internet
Both radio and TV have been operating for decades profitably using the ad revenue model with no signs of changing that model anytime soon.
Does that mean there’s a problem exclusively with being able to use that model on the internet? Let’s look at the top ad revenue internet companies, Facebook and Google.
Quarter 2013 results:
Google: 1st Quarter:
“Google said Thursday its profit climbed to $3.35 billion in the first three months of the year as revenue thrived despite a trend toward cheaper ads on smartphones and tablets.” (Article link)
Facebook: 2nd Quarter:
“Facebook’s revenues soared by 38 per cent over the first quarter, the social network said yesterday, as it earned more from mobile ads and grew its user base to over 1.1 billion active users every month, up 23 per cent in year on year terms.” (Article link)
So it’s clear that these companies are doing quite well with the ad revenue model.
Let’s looks at individuals using the ad revenue model- YouTube video bloggers.
Infographic on YouTube top earners: Link
Looking at the linked info, the top YouTubers are making hundreds of thousands to millions of dollars using Googles Adsense shared revenue model.
Based on this info, the ad revenue based “free” model seems to work just fine on the internet. So anyone making the case that the model is slated to fail would be in error because the proof says otherwise.
So did Xanga run into trouble because the ad revenue model was doomed to fail? I just showed the model works fine, so it can’t be that.
The answer is clearly that Xanga’s decreasing net traffic was the culprit:
Conclusion: The problem isn’t that the “ad revenue model” is bad, but that Xanga has lost too much net traffic to earn enough to pay for itself.It’s important to realize and understand what the true problem is in order to come up with the “correct” solution.
Comments (7)
The argument that ad-based websites fail seems odd. As you pointed out some pretty big companies make a good living with ads.
I think it’s rather a sign that a site hasn’t thought and figured out HOW to make money through ads.
Seems you’d have to look at more than just the top running companies on the internet. There may be other reasons why they are top running, getting the traffic, and therefore having people see and use their ads.
@beowulf222 - Big companies and regular individuals alike seem to be doing just fine. It appears the “blame” is going outward when it’s likely inward.
@FalconBridge - I included individual YouTube folks who earn a living via ad revenue – you can’t get any smaller than a one person operation. So it appears there are both very large and very small entities doing well with the ad revenue model. Some the individual earners could pay Xanga’s bills with just a fraction of their income.
@SoullFire - 1 of the main reasons why I joined Xanga was because it was free even though this site has had many glitches, when I 1st joined in January. I can’t always be the 1st responder to every Xangan friend and subscriber’s page depending on they type of theme they use. Even some of the paid users are angry with the lousy service. Since Xanga wants to oust us free users, I’ve already been transferring my Xanga blogs to my Blogster page.
@RealistMe - Yeah, they are now breaking the mold by not even offering a free trial service.
@SoullFire - Talk about screwing over their Xangan users. Gotta love that. That’s why I’m trying to collect my most viewed Xanga blogs and post them on Blogster. That way, I can jump ship, when the time comes.
Xanga is dead because their whole concept of running a blog site/business is still based on a platform they haven’t upgraded from in over 10 years. In terms of the internet and the pace of how fast technology moves…they’re light years behind everyone else!
Mobile app sucks balls, they don’t do anything at all to attract new users, and all the old users who are left are rapidly moving, dying, they sucks balls, or are jumping ship.
Now they want their users to pay for their service when almost everywhere else it’s free?
fuggeddabouddit.