Monetisation Models

August 5th, 2008

Monetising your web service has been a topic I am forever intrigued with and been bouncing around as a blog post for a few weeks now.

Given recent discussions on Twitter I thought I’d grab this out of drafts and post it.

In terms of monetising your service, what options are there?

Idea is provide a free service with a premium model where loyal fans pay for extras.ย  The inherent problem is creating enough value in the premium option to swing users to pay (creating status is key).

Ads based
Make money off advertising, default is to use adsense.ย  Problem here is this is based on large volumes to cover your services.ย  No good if your starting out.

Glue ons
Features to your site that are actually of value to your users.ย  I call them glue ons.ย  You glue on a new feature (if your users like it, it sticks, if not it falls off).

Examples include: Job Boards (where people pay to list), Toolbars (which generate revenue help user), Consulting Time/Services, Ebooks/Book…

Long tail of monetisation
There are lots more: donations, blog sponsorship / paid blogging, selling links, cross selling, special one off content, limited edition merchandise


Looking at all of the options think anything that helps your users is likely to help you.

A job board that helps your visitors whom will need a job at one time or another, a paid fan club that gives me extra benefits (and status) that no one else gets, access to special reports that other have to wait 3 months for.ย ย  Think about what you can glue on.

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2 Responses to “Monetisation Models”

  1. stuartm Says:

    The key to the freemium service is finding the right balance of free features (so that lots of people use your service) versus the premium features (so that lots of people upgrade to premium).

    I think Flickr is the prime example of getting that balance right.

  2. scollings Says:

    Monetisation can be a) Income or b) Savings on expenses.

    By that I mean your companies Profit is Income minus Expenses so if you can add ‘glue-ons’ to reduce costs it will have the same effect.

    One example (not a great one, but it gets the point across) is adding a system (glue-on) like OTRS (trouble ticketing / auto responder) which allows you to stop the expense of calls coming in and makes your service more ‘sticky’ as it gives the customers what they need.

    That way if you service is free then you won’t get support calls making it a loss for your company.

    Of course there was (dunno if there still is) benefits to owning a company that was making a loss when it comes to Tax time.

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