When something becomes popular, the fashionable thing to do is to figure out what comes next. Even if we still haven’t really figured out the value of the thing we’ve already proclaimed dead (or slowing down).
On July 13th, 2009, Winston Ross posted to his Blog the article, The Next Twitter?, which was supposed to run on the Newsweek website but got killed because Time Magazine did a Twitter cover story around the same time. Within his article/Blog post was a very interesting quote from Ian Muir (a web developer with Amplified Studios):
“A lot of the things these sites have to do to make money are the same kinds of things that drive users away. Part of the reason Twitter has so many users is there’s no ads, no noise. They’re also not making any money. Facebook, as they’ve brought in more ads, they make more money per user but their growth rate has slowed way down.”
Are we really at the point where consumers now want everything for free and they will leave if this freeness comes with ad support?
Are we also saying that if you introduce ads and start making money that this is a sure sign that your growth rate will slow down?
This can’t be the case. Consumers who get free platforms, content, etc… understand that it comes at a cost and that cost has, traditionally, been advertising. The model seems to work (just look at the deluge of iPhone apps and how the free versions have ads, but the paid versions are ad-free with some additional services). The challenge with this model is more about inventory and options than growth rate or abandonment. The reality is that with so many online newspapers, Blogs, portals and platforms, there is a plethora of ad space available and this drives both CPM and CPC prices lower (it’s becoming the opposite of a scarcity model… welcome to the abundance model).
People don’t leave when companies make money or run ads, they leave when it’s no longer valuable to them.
We also have to careful about how we measure/define success going forward. A lot of the conversation about how we define success with Social Media and Digital Marketing revolves around the sheer mass volume of people – not the engagement, connection of wealth of data and information that comes from within. Ads and the "things these sites have to do to make money" are not the same things that drive users away. In fact, it may not be driving anyone away, it could simply mean that there is fatigue with the usefulness of the platform or that the mass number it currently reaches is the critical mass.
Advertising is never what drives people away. Do you agree?