Table of Contents Different Revenue Models for online creators.
- What is a revenue model?
- Different revenue models for online creators.
2.1 Advertising
2.2 Affiliate
2.7 Content as Facilitator of Selling Products and Services
2.8 Selling Content as a Product
2.9 Collecting Donations
2.10 Selling Advertising Space
2.11 Collecting User Information
2.12 Memberships
2.13 Add-Ons
2.14 Joint Ventures
What is a revenue model? A revenue model is a conceptual structure that states and explains the revenue earning strategy of the business. It is a framework for determining how a business will earn revenue. Revenue models map out the value proposition of a business, how to price the value, and how customers will pay for it.
Different revenue models for online creators. There is no such thing as a perfect revenue model, but the popularity of some of the methods below suggests that many of them are well-tailored for the current state of the market. Here we’ll walk through each type of revenue model and when they may be most beneficial and applicable.
2.1 Advertising Advertising allows any platform that courts a significant amount of traffic to turn that traffic directly into revenue. You have seen it on your favourite blog, media site, and social media platform (think Google, Facebook, and LinkedIn): The popularity of the medium is valued, and advertisers pay to feature their product somewhere on it (known as display advertising) in order to co-opt a percentage of that site’s user base.
2.2 Affiliate This new, popular model works by promoting referral links to relevant products and collecting commission on any subsequent sales of those products. Many vendors allow affiliates to promote their products in exchange for a commission. Leverage your product’s synergy with another product in an adjacent space and you both stand to gain. The affiliate model can also be used effectively by content creators, allowing them to recommend related products without taking on the research and development costs. Additionally, affiliate marketing lets you test a market before committing to it fully, so you can reduce your risk before investing a large sum. 2.3 Revenue from subscription access to content Subscription-based revenue model, sometimes call time-based access models, are very popular in the content industry. Many news outlets offer different packages for monthly, quarterly and yearly access to their articles. But such a model is not limited to journals and news publishing companies. Many streaming services (such as NetFlix and Spotify) use a similar model for selling their content to the audience. A range of documents can be accessed for a month or typically a year.
2.4 Revenue from Pay Per View access to documents Here payment occurs for single access to a document, video, or music clip which can be downloaded. It may or may not be protected with a password or Digital Rights Management. Smart Insights monthly subscription is effectively PPV since members are limited to 5 downloads per month (otherwise they could download 100s of resources potentially). 2.5 Revenue from sponsorship of site sections or content types (typically fixed fee for a period) A company can pay to advertise a site channel or section. Sponsorship contracts are used by businesses as a part of brand awareness or brand identity management efforts. In this model, a business covers the whole business costs (sometimes with a mark-up) and asks the content creator to guarantee a certain level of some performance metrics. Large brands have provided sponsorships long before the internet, but a growing number are now willing to use their budgets for web businesses. Even start-ups are looking for strategic sponsorship opportunities to get their business in front of a targeted audience. You can offer sponsorships of a section on your website, at the start of your videos, during podcasts, and anywhere else where you command an audience. 2.6 Subscriber data access for e-mail marketing The data a site owner has about its customers is also potentially valuable since it can send different forms of e-mail to its customers if they have given their permission that they are happy to receive an e-mail either from the publisher or third parties. The site owner can charge for adverts placed in its newsletter or can deliver a separate message on behalf of the advertiser (sometimes known as list rental). A related approach is to conduct market research with a site's customers. 2.7 Content as Facilitator of Selling Products and Services This is one of the classic approaches to revenue generation in the online world and most of the first e-commerce websites were grounded on such a basis. For example, you have a CRM solution, and create a large amount of content around this topic. There are various roads to revenue through this approach to the content creation: • Attracting visitors who are interested in CRM products (inbound marketing) and introducing/selling them your solution. • Educating people and aligning them with your approach to the CRM (It will be easier to convince them / their companies to buy your product) • Building brand awareness for your company/product and using it as a competitive advantage in the market 2.8 Selling Content as a Product The content itself can be sold as a product. Selling audiobooks, pdf files, research papers, and market reports, are still popular in various topics and can be considered as a source of revenue. However, you have to find your own ways of dealing with the content piracy. 2.9 Collecting Donations Yes. Collecting donations can be a revenue model for content creating organizations. In this model, you provide content to the audience and ask them to donate if the content is helpful and they are happy with it. Collecting donations can be considered as a crowdfunding business model in which funders are not looking for their principal money and its interest. No matter you call it donation game or crowdfunding, sure the success of this type of revenue model depends heavily on the audience culture and type of the content you provide. Many of the donation-based revenue models, use it just as a complementary revenue stream. It means that they have a primary revenue source (such as creating and delivering sponsored content) and use donations to complement or cover the other revenue streams. 2.10 Selling Advertising Space Selling advertising space is still the most popular indirect revenue model in the online content-creation world. Many social media companies, news websites, personal blogs, and professional forums, rely on selling advertising space to the other businesses. Some of these businesses (usually the ones with a large audience base) sell ad-space directly to the others, while smaller ones, use the third-party platforms such as Google’s Adsense service. The Ad Space Selling (ASS) Revenue Model is as old as the modern content industry itself. This practice got popular even before the digital age by newspapers, radio stations, and other mass media. 2.11 Collecting User Information Latest advances in big data and data mining practices have resulted in various opportunities for turning the user information into money. Here are just some of the marketable user information which many companies and organizations are willing to pay for them: • Market Demographics • User Values and Preferences • Search Terms • Product Comparison Cases • Contact Information • Market Gaps • User Needs As such reports need a large user base, it’s more often used by content platforms (e.g. social media) than content pipelines. Extracting and selling this kind of information has always been a source of debate, with many ethical activists criticising them as unethical. However, the companies usually refer the critics to the not-read-but-easily-signed terms and conditions while users register for the service.
Alexa Rank and total monthly visitors are among the most popular metrics used These kinds of sponsorship contracts are not limited to the companies. Nowadays, you can find many individuals who enter sponsorship deals with content creating businesses, to improve their competitive position in the professional services market.
2.12 Memberships A popular model is to offer membership subscriptions, typically paid on a monthly basis. Subscribers are free to cancel at any time, but they usually remain for an extended period if the service is good. This type of model can be used for a variety of products and businesses, including digital information programs, software as a service, and streaming media. A major benefit is that you can rely on a fairly consistent amount of revenue based on the average length of time members stay subscribed. 2.13 Add-Ons Developing add-ons for established products can be enough to develop an entire business around. For example, creative phone cases allow you to market to a huge number of people with phones. A software company could build apps designed for a major social network like Facebook. While some add-ons might be overly dependent on another business, it is possible to create something that enhances products that are based on a whole industry rather than a particular brand.
2.14 Joint Ventures Joint ventures or partnerships are a great way for a business to earn a supplementary income. You may offer a particular product or service, but there are also related products that customers could benefit from. For example, you might sell bodybuilding supplements, so it would be mutually beneficial to work with businesses that sell workout equipment and fitness programs. Instead of treating everyone as a competitor, consider how you can benefit other partners in a combined effort.
These options are proving successful for online businesses in all kinds of niches. Many of the most popular websites use these models, with simplicity often pointing the way to success. You could even combine the different strategies to fit your business. For example, advertising might be your primary model, but you also work as an affiliate for related companies. While some businesses might not have a clear model that fits with your concept, by developing an adaptable business that allows you to experiment, you can focus on your core concept until the best revenue model presents itself.