[jacques_chester]

Advertising sucks because worldwide inventory grows faster than the supply of eyeball-hours to view the ads. So there's constant downward pressure on prices.

Subscription sucks because you have to fight subscriber fatigue ... if you can get someone to sign up at all. People sweat over $5/month memberships; meanwhile they spend $20/wk on coffee.

Micropayments suck because everyone hates the mental overhead.

I have a solution I call "microsubscription". The only problem is that it's been tried by others and failed. Naturally I feel I've got the magic ingredients that the others didn't have, but ... we'll see.

[chewxy]

And yet, there are still sites that will command a high eCPM. The difference is of course, the audience quality.

Like I mentioned in my latest blog post[0],

> Real time bidding engines are getting more and more intelligent, and would be able to guess with quite good results, how valuable a user is to the advertiser. This allows the advertiser to only pay high amounts for audiences that matter to their ROI, while paying low amounts to audiences that don’t.

> What happens is then this: a segregation of high paying advertisers and low paying advertisers form. When I say high paying advertisers I mean advertisers who would pay high for the right audience. They will pay significantly higher than the low paying advertisers, who would “spray and pray” their ads in hopes of reaching the right audience.

I maintain that if a startup is able to build the correct audiences (StackOverflow building an audience of IT professionals for example), the revenue from advertising will be substantial.

[0] http://blog.chewxy.com/2013/03/06/startup-business-models-ad...

[jacques_chester]

My original motivating problem was: how do blogs I like make money?

Blogs that aren't about answering Oracle Obscure Platform 6.75a-R2 questions. Blogs that aren't about mesothelioma. Blogs that aren't "review" websites.

Honest, good old fashioned smart people writing thoughtful stuff.

Based on who I've talked to in areas of business and politics and the visible spread of ideas in Australian public intellectual life, the demographics for the blogs I directly host are amazing. Highly paid professionals all round. They're read in ministry offices and C-suites all over the country.

To scrape some of this high-quality audience $$ I'd need to adopt a very high touch advertising policy and use invasive user tracking to prove my demographics. I don't have time or the moral flexibility and neither do the bloggers.

Hence: how do the blogs I like make money?

(Answer right now is: at their dayjobs.)

The technology I've developed allows users to be tracked visiting participating websites without the websites being able to piggyback on my scheme to track users across multiple sites. It's resistant to the visit falsification attacks present in any standard tracking scheme.

Pointless without a business, of course. So watch this space, I suppose.

[chewxy]

Ever thought of advertorials? Advertorials + rev share would be a good idea had you not listed "moral flexibility" in your list of constraints.

I noticed you host John Quiggin. I used to read him a lot. This is how he would use his blog to make money: sell his books to his blog audience. Tyler Cowen, the guy behind Marginal Revolution used to have this trick where he would give you access to his private cooking blog if you bought his book. Some form of managed affiliate system would be my best guess.

Also, mesothelioma is soooo 2005. :P

[jacques_chester]

When I wrote my honours project (which was the first version of the tech I developed) I mentioned merchandising; it's pretty hit-driven though.

I personally make money on affiliate links to Amazon. By which I mean "I get a minute subsidy on my book habit".

Some of the bloggers make a few dollars on advertising, but the amount has steadily fallen because they aren't sufficiently narrowly focused to be worth finding a niche advertiser. And they aren't sufficiently widely read that a more general A/B brand-awareness advertiser would pay much over open-market CPM.

[chewxy]

You seem to have found the problem by yourself. IMO this would be the trough of sorrow[0] for any startup with advertising as a monetization plan - the growth but no growth phase.

In my blog post I mentioned that here there are basically two paths to go - both of which you have identified. If you want to stick with advertising, choose one?

[0]http://www.avc.com/a_vc/2012/03/the-startup-curve.html

[jacques_chester]

I am choosing to invent a new model, actually :)

[wizzo]

I have been using a microsubscription model for an MMO strategy game for iPhone/Android that I helped develop. (http://spaceuncharted.com) We charge $1/month or $10/year for access to the full game. Here are some things we've learned:

-- Apple only allows auto-renewing subscriptions for magazines, newspapers and other periodicals. So, for us, users have to re-subscribe every month, which has lead to very poor retention rates. On Android, we use auto-renewing Paypal subscriptions, and have had more success.

-- Having to manage separate billing systems for iPhone and Android adds a lot of development time and headaches. The Apple billing system is particularly time consuming because the errors you get if something isn't configured just right are not helpful.

-- Subscribers can have very high expectations for a service that is costs $1/month. When they're paying, they (rightly) demand a high quality product. We've been very liberal with giving out refunds or credits when bugs have arisen or we've had server downtime.

[jacques_chester]

Is "microsubscription" already the term of art in game development circles? Because I'm talking about a quite different funding model.

If the term is already being used to describe low subscription fees I'll need to thinking of something else.

FWIW, the tech I've lodged with the patent examiners could be extended to cover games as well (and I made sure to write a game in as an example). Single payment/funding scheme for web sites, web apps, phone apps etc is possible.

Edit: some googling sees a multitude of definitions (I wonder why I didn't notice this before?). I guess good names are hard to find.