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Why Web 2.0 cos need to share ad revenues with Google?
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Sebastian,
I must say that similar thoughts crossed my mind as well. However, it is going to be a Herculean task for the Web 2.0 cos. Most of the Web 2.0 cos start with little or no VC at all. The revenues from these ventures are not very high as well. So, in my opinion, if they display ads served through third-party networks, it saves them a lot of overheads and expenses.
Perhaps sharing the ad revenue pie is the compromise that an overwhelming majority of these Web 2.0 companies will happy settle for. However, having said that, I would like to say that the success stories like Digg and YouTube should give it a thought on how to do away with third-party ads. Maybe what you suggested can work out for them. After all, money needed to have a marketing team and develop technology won’t be very difficult for them.
I must say that similar thoughts crossed my mind as well. However, it is going to be a Herculean task for the Web 2.0 cos. Most of the Web 2.0 cos start with little or no VC at all. The revenues from these ventures are not very high as well. So, in my opinion, if they display ads served through third-party networks, it saves them a lot of overheads and expenses.
Perhaps sharing the ad revenue pie is the compromise that an overwhelming majority of these Web 2.0 companies will happy settle for. However, having said that, I would like to say that the success stories like Digg and YouTube should give it a thought on how to do away with third-party ads. Maybe what you suggested can work out for them. After all, money needed to have a marketing team and develop technology won’t be very difficult for them.
I agree, Digg and YouTube are big (and well funded) enough to hire staff they need and develop the technology. But most web 2.0-companies aren’t that big. :)
Especially in case of YouTube, they are currently doing exactly that - hiring sales staff. I’m really looking forward to their advertising ideas.
On the long term, it’s not intelligent being dependent on Google AdSense, because they are very, very strict with click fraud actions. A project of me was kicked out of Google AdSense because of click fraud.
But for small companies, Google AdSense is at least in the beginning, the best solution. (I’m looking forward to Microsoft adCenter and the all-new Yahoo Search Marketing)
Especially in case of YouTube, they are currently doing exactly that - hiring sales staff. I’m really looking forward to their advertising ideas.
On the long term, it’s not intelligent being dependent on Google AdSense, because they are very, very strict with click fraud actions. A project of me was kicked out of Google AdSense because of click fraud.
But for small companies, Google AdSense is at least in the beginning, the best solution. (I’m looking forward to Microsoft adCenter and the all-new Yahoo Search Marketing)
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the reason why Google gets a part of the revenues is simply that they pay their sales staff, that they promote AdSense to webmasters (at least in Germany, 50 euros in AdSense cash is included with many webhosting offers).
the web 2.0-companies could hire sales staff, too, and try to attract companies to buy ad space at their sites. than they needed to develop or buy some technology to serve them contextual, and in the end it becomes much more difficult for advertisers to actually do advertise, because they have to know all the small projects that want to sell their ad space.
AdSense is far from being perfect, but it makes the web 2.0-companies focus on what they should do: develop new innovations!