Business Models

Posted On: 2008-05-08

Ok so it's Thursday, I've had coffee down by the beach and now I'm ready for the day ahead but I'm also thinking about some of the things I did yesterday. It was one of those days where I seemed to be busy all day but didn't actually have much in the way of completed work at the end of the day.

I did manage to get some networking done and sometimes that can be just as important as completed work. And while I was networking I sat here and listened to an online radio program featuring some of the A-list bloggers here in Australia. It was interesting to hear them talk about advertising and the amount of traffic they get each month and it did make me wonder whether affiliate marketing really is the best business model for webmasters in adult.

You wouldn't have to have a degree in rocket science to see that affiliate marketing really does suit the sponsors perhaps more than the affiliates. Not only do affiliates make sales for the sponsors but affiliates also provide a lot of free branding for the sponsors on their sites and that's something that's very important.

Of course, when there are affiliates making sales then a sponsor does have to pay a lot of money out each month in commissions but that could a whole lot less than what they might be paying if the affiliate model wasn't so popular and they had to rely on other forms of advertising to attract sign ups.

Over in mainstream the affiliate model is quite popular but then so too is just paying for advertising on popular sites. And that straight advertising can be very expensive whether you're paying for the advertising per impression or based on a set period of time.

For example Techcrunch is one of the leading blogs that gets read by people from a variety of industries and they have two columns of advertising on each page. For a 125 x125 pixel ad they charge over $20,000 dollars. Now imagine if a sponsor in our industry had to pay to advertise on the adult equivalent of a site like Techcrunch.

They would need to make just a tad over 571 sales to pay for the advertising ... on just one site ... and of course they would need to be advertising on a lot more than just one site. So that's a business model that's always going to work for the site owner just so long as they have the traffic numbers to justify the cost of advertising.

On the other hand we have the current business model where the sponsor only has to pay when a sale is made regardless of how many sites their advertising appears on. I know which business model I would prefer ... and I know which one we're never likely to see here in adult.

Steve was talking to the owner of one large mainstream celebrity blog yesterday. With 300,000 page views a month he's just hit the tipping point when it comes to traffic and of course that means that people are really becoming interested in paying for advertising on his site. It's not necessarily the type of advertising that you might always think would be a good fit with a celebrity site either.

It seems that over in mainstream there are a lot of businesses who are prepared to advertise online but they can't find sites with traffic numbers that make it worthwhile advertising and the site's content doesn't always have to fit perfectly with the whatever is being advertised. Now that the guy Steve was talking to has hit some big traffic numbers the requests to buy advertising space are beginning to roll in and the hard work that he's had to put into the site is beginning to pay off.

It's interesting to compare his business model with the business model of most affiliate marketers in adult. Sure we talk about needing big traffic numbers to make money but many of us want to spread those numbers over multiple sites. Here is a guy who has just one site and that's where all his traffic is focused.

Wouldn't we be better to look at ways of attracting those big traffic numbers we talk about and focusing that traffic on just one site rather than trying to attract traffic from link lists and TGPs with a new site every day?

It's just something to think about as you go on building those free sites and galleries. As you do think about it you'll realize that some people are making a very similar business model work for them and they do keep on attracting lots of traffic numbers every month.

So how can you make that business model work for you?