Entrepreneurship in digital is very appealing. Society is currently bombarding us with messages to undertake, take the direction of our lives and so on. And it is very true that the internet has reduced many costs that we faced with traditional businesses. Remember Direct Mail Insurance Leads this post about common mistakes when undertaking on the internet .
One of the most “popular” models in this wave is the advertising-based model. A model that the media have followed traditionally. Is a business model based solely on advertising in the new digital world viable?
What is a business based solely on advertising?
The general advertising model works through an advertiser who pays an intermediary to show his ad to an audience that interests him. The more public the intermediary gets, the more the advertiser will pay since, for statistics, he should sell more. On the internet, it’s practically the same.
The only thing that changes is that the advertiser does not pay in advance waiting for a public data, as in radio or television. But currently in most websites, the advertiser pays back based on the visits received by the page and / or the number of clicks that those visitors have made.
It is also possible a prior agreement between advertiser and intermediary that usually walks in a mixed model: paying a fixed part and another variable depending on the visits or clicks.
How is advertising placed on the web?
The most commonly used format is the banner. The banner is nothing more than an own space assigned for advertising that does not bother to enjoy the content of the page. Before, pop-ups were also used, but by occupying the whole screen suddenly they are considered very intrusive for the user.
And there are numerous plugins and modules that manage banners and other advertising formats. So it is very simple to implement it. And one of the most used tools is Google Adsense, which automatically generates the content of the ads according to the tastes of the users (thanks to the cookies and their browsing history).
Is a business based solely on advertising viable then?
The data and news are not very optimistic. In general, these businesses do not give much of themselves and the best example is the media. Traditional media are in a crisis because of their business model, since digital advertising is often not enough to offset costs.
However, there are other websites based on content that have a lot of pull and manage to be profitable. But, for this, it is necessary to generate a high quality content and a good marketing plan that allows reaching many users.
Although difficult, web advertising is an income-generating resource that can work. Or at least it can be an important part of the monetization of a website (or blog), provided it is complemented by other sources of income, which we will talk about later.