Monetising web sites has been largely about advertising and that has been pretty much about eyeballs on those web sites. This works well with sites in more developed countries like the United States where popular sites attract hundreds of thousands of visitors a month. TechCrunch, for example, has roughly 127 000 subscribers to its feed alone. With numbers like this there is a lot of money to be made from advertising on these sites.
Traditional web advertising (it is a little strange called advertising channels that have only been around for a decade or so "traditional") depends on factors like who and how many people are viewing these ads. Ads showcasing local products are services are worth far more if they are seen by people who are actually going to buy those products and services. The challenges with this form of advertising in South Africa, as I understand it, include the fact that not every visitor to the site is primed for the ads they see and the problem that we simply don’t have the numbers of people visiting web sites to make those ads as valuable as, say, ads on American sites advertising products sold by American retailers.
One solution is to change the ads and make them a little more targeted so the ads served are appropriate for the people viewing the ads. A good example of this is Google AdSense which really relies on large numbers of visitors to make any money from it. The advantage of AdSense is that its success doesn’t rely on users from specific geographic locations or demographics because it works on the basis of clicks on ads presented by Google. What makes AdSense effective is the targeted nature of the ads served depending on the surrounding content on the site itself. A blog that talks a lot about cameras will have ads about cameras and photographic accessories so people who visit that blog will see ads about something they really care about. This makes these sorts of ads far more effective in some ways and less profitable because of their reliance on large numbers of people clicking on the ads.
AdSense ads and similar targeted ads also represent a move away from emphasis on page views as a measure of the value of advertising on those sites. There is a pretty detailed discussion about the decreasing value of page views on BuzzMachine which touches on this difficulty with traditional forms of conducting advertising on sites which is based on those same page views. One of the contributing factors is the increase in the so-called distributed media economy where various forms of media find themselves on sites, for example embedded YouTube videos in blog posts. How do you measure the reach of a video on YouTube when that video can be embedded on countless blogs. How do you monetise that?
A bigger question, at least for me, is how do you meaningfully monetise South African blogs where those blogs don’t have nearly the numbers of visitors that you see in the more popular blogs in the United States, for example? Obviously targeted advertising is more effective than blanket advertising using banner ads. The question is how to present ads that are worth more with fewer numbers of people seeing those ads. Is that something that is even possible? Is all advertising worth the same amount and does that mean that local bloggers who wish to monetise their blogs effectively will have to find alternative revenue streams to advertising? What do you think?
While you are thinking about that one, take a look at a post titled 2007: The End of the Page View on the blog, A VC.
(Source: Seth Godin)