« Back to the blog
Oct 06

Ad Model vs. Premium Model

by Harrison • October 6, 2008

The Spokeo Perspective

As most of you would agree, the Web 2.0 era is long over.  Web 2.0 was categorized by ad-based business models.  Everything has to be free, and advertisers would somehow pay the bills.  We entrepreneurs chased after user counts, and the ad dollars were assumed to flow in.

We started Spokeo with the standard "Google AdSense" ad model.  We thought that if we’ve built something cool that people like, we would earn enough to cover our operations and someone would buy us out.  This sounds naive, but that’s what we were dreaming, and I bet that’s what every TechCrunch reader was thinking back in 2006.

The pursuit of user counts works fine if the ad CPM (cost per thousand impressions) stays at the 2005 level.  Back then, advertisers hadn’t figured out that user-generated content converts poorly into sales, so these advertisers paid more for the benefits of the doubt.  Take Google as an example.  Google paid MySpace $900 million dollars in 2006 to take care of MySpace’s ad inventory, and all Google got in return is the lesson that user-generated content doesn’t monetize.  Advertisers aren’t dumb, and they won’t pay for ads that don’t work forever.  CPM for user-generated content took a nose dive around 2007, and all Web 2.0 sites with ad-driven business models were affected.

Spokeo cannot escape this fallout.  We ran ads for 3 months in the beginning of 2008, and we quickly realized that even if we grow the traffic by 100 times, we still couldn’t cover our basic costs.  Facing the hard reality, we made one of the biggest business decisions by turning Spokeo into a premium service.  It’s a last-ditched effort to save our business, and we didn’t know what to expect.  Fortunately, there were many people who like Spokeo to pay a little to support us, and now we should be able to weather through this economic downturn. 

Here we would like to thank all of our users for supporting us, and we would continue to introduce new and innovative products in the near future.  We got something huge scheduled for January 2009 (big projects always take time), so stay tuned!

« »

64 Responses to Ad Model vs. Premium Model

  1. Rhonda says: Oct 7th, 2008

    I dont mind paying the 29.00 but you really need to add something that will make being on the premium plan worth the money. Reveal private sites,
    or give codes to get into them. your advertisement reads get information on friends, old boyfriends ect…. yet there is nothing. If I have a friend on my email list then I know what social groups they are in. I want to see the people that I dont know the email address…. They dont want me to see what social groups they are in…. and if they are private I want to see it. That would be worth 29.00.
    I could have paid a little more for net detective and gotten criminal backgrounds, ss #, addresses, phone #, and so on.

    I hope you do something exciting before January…..
    Thanks and Good Luck

  2. harrison says: Oct 8th, 2008

    Our goal is to find out your friends’ public activities across different social networks. It’s not to break into people’s private accounts. It’s a fine line between tracking people’s online activities vs. breaking into people private journals, and we don’t want to cross that line. Hope you can understand our decision and consideration.

  3. trevelyan says: Oct 14th, 2008

    >> It’s a fine line between tracking people’s online activities vs. breaking
    >> into people private journals

    No it isn’t.

  4. garrett says: Oct 17th, 2008

    Good luck charging, for something in a fledgling economy. See perhaps you should cut staff and realize that no amount of VC will amount to much with a weak business model. Your statement that the ‘web 2.0 era is long over..’ You are an aggregator for web 2.0 sites. Good luck in the failing economy. It’s good web 2.0 is over because you’re running your site like web 1.

  5. PI Grrl says: Dec 17th, 2008

    I learned a lesson starting out in business. “Good things are seldom cheap, and cheap things are seldom good.”

    I certainly can understand Rhonda’s request to “get more content” however sites which require password entry or invitation only viewing hold a legal expectation to privacy. If you defeat it, you are going to find yourselves in court. And don’t we all know that technically it’s possible, but how would you automate that? I mean XML isn’t exactly unbreakable, but I can see the quality control tests now (eeek!).

    That said, I am a premium subscriber and am a supporter of your service. I’m writing up your product for my Intelligence newsletter, data2know.com (January 09). Even with limited access to ‘allowable only’ sites, your engine is amazing! I’m also writing on Tom Whitley’s Lococitato.com (you should join forces!) and What’s Yo Name (yoname.com).

    For those who would gladly destroy their PC’s with virus infected Net Detective you are misled. Save your money and learn about public records @ brbpub.com. The rest of us will enjoy the Web 2.0 to 4.0 developments, and encourage the Developers to stop giving their products and processor time away. Even MIT had grant money supporting all those hippie developers. ;)

    PI Grrl.

  6. justmabel says: Jan 11th, 2009

    It’s great to be able to leave a comment, but how would you like to be paid for every comment you left! I have a product that pays for giving your opinion to companies ,taking surveys, and previewing movie trailers. You have to check this out if you are looking for extra money, and like to leave comments.Limited time offer!

  7. justmabel says: Jan 11th, 2009

    The website is here for the survey job. This is a great opportunity for people who enjoy commenting about things they read, or see or do. You can paste it to your browser. This is a limited time offer! https://paydotcom.com/r/11804/justmemabel/22035432/

  8. justmabel says: Jan 11th, 2009

    Do you belong to social networking websites? Do you realize that myspace, facebook, and utube are set to take over the popularity spot from google? That is an amazing amount of traffic! If you are trying to make sales, or become noticed in this market, this is for you. Check out this website. You will be intrigued with the possibilities! https://paydotcom.com/r/9179/justmemabel/22197599/

  9. Wedding Invitation Kits says: Feb 8th, 2009

    Thanks for a such a important and informative post about wedding cards and informtion about the variety of cards. I need this info but for what i don’t tell you.
    Thanks for such a nice collection.

  10. Wedding Invitations says: Feb 11th, 2009

    Thanks for a such a important and informative post about wedding

    cards and informtion about the variety of cards. I need this info but

    for what i don’t tell you.
    Thanks for such a nice collection.

  11. Pete says: Feb 14th, 2009

    Social networks is a weapon in the BigBrotha’s hands

  12. Nina says: Feb 21st, 2009

    The problem I have with this has nothing to do with if its wrong or right to look at some one else private profiles. That is a personal choice, which some people may have good reason to need, with no intent to do harm. My issue with this site is if a company advertises they can or will get you into hidden profiles and then don’t they are nothing better than “con men” that take advantage of desperate people. Type in Basic search commands for finding hidden profiles and this site turns up as a provider of such services. The bad guy isn’t people desperate to know more about someone, its the company that takes em for a ride.

  13. bed critic paul says: Feb 25th, 2009

    That was an interesting read. Didn’t realize that user generated content was actually a con in terms of PPC advertising. Google definitely has the market for this but it’s surprising that Spokeo decided to switch up as a premium service. There just wasn’t enough volume of clicks to justify the costs based on impressions? Strange. Well, business models can be adaptive and sounds like switching to a premium service is the way to go in this case. ~Paul

  14. Fast Weight Loss says: Mar 7th, 2009

    Finally, a diet that makes sense!! Come check it out.

  15. ann says: Mar 7th, 2009

    check http//trypu.com

  16. kurye says: Mar 12th, 2009

    thank you. very good article

  17. Debt Consolidation Information says: Mar 19th, 2009

    Great Article; a lesson to be learned here. Never sit on something, always look for something new.

  18. Essay Writing says: Mar 23rd, 2009

    Excellent essay content! You have written very useful tips!

  19. Ana says: Mar 25th, 2009

    Hi I was surfuring the net and found your post. I found this post useful and created. Thanks

  20. Essays says: Apr 1st, 2009

    Great and very helpful article. Thanks for useful guidelines.

  21. diyet yemekler says: Apr 5th, 2009

    I’ll keep reading your articles.

  22. Priceless info says: Apr 5th, 2009

    pricelessinfo.webs.compriceless info the home of the new technology and programs around. Here you will find info on whats best to use and how to use them. There are programs here that will help you out in everyday life and make your computer work much better.

    http://www.pricelessinfo.webs.com

  23. Fast Weight Loss says: Apr 26th, 2009

    Great article, very informative

  24. Ad Inventory says: May 6th, 2009

    Thanks for the information.

  25. kurye says: May 8th, 2009

    thank you for your share.

  26. Linzy says: May 18th, 2009

    This was a very interesting article… thanks for sharing.

  27. Raja says: May 27th, 2009

    Great information.I really liked it.Good Going.Thanks again

    Raja

  28. kurye says: Jun 2nd, 2009

    thanks you. very good article

  29. namensschilder says: Jun 3rd, 2009

    we started also with google adsense to earn money on our projekts.
    now we make mones only with our webshop
    the old economy is the best

    Best wishes from germany
    namensschilder

  30. çeşme oteller says: Jun 9th, 2009

    Spokeo Blog | Find People through People Search » Blog Archive » Ad Model vs. Premium Model great article thank you.

  31. herbalife says: Jun 13th, 2009

    Hey, if you give out great content, I agree, people are willing to pay but it has to be super awesome content that you can’t get other places.

  32. Estetik says: Jun 16th, 2009

    thank you very nice article very best information

  33. Download Torrents says: Jun 16th, 2009

    yes i can say every one will pay if it is Unique and that the brand if you make then it sells big

  34. burun estetiği says: Jul 16th, 2009

    Spokeo Blog | Find People through People Search » Blog Archive » Ad Model vs. Premium Model great article thank you.

  35. media buying says: Oct 6th, 2009

    I doubt that the reason that spokeo failed was because of the fact, that ads don’t work on user generated content. Honesty it is just a matter of knowing how to place your ads, and having good content to back it. Otherwise facebook would have fallen under a long time ago. Nobody is going to pay money for the rite to use a website.

  36. estetik burun says: Oct 7th, 2009

    very useful information for me to read.

  37. peynir says: Nov 29th, 2009

    I’m really very useful to follow a long-time see this as a blog here Thank you for your valuable information.

  38. check up says: Dec 14th, 2009

    thank you very muc. usefull article

  39. cam balkon says: Dec 28th, 2009

    we have benefited a lot as the best courier companies thanks. nice sharing

  40. Melvin Lucien says: Dec 28th, 2009

    Advantageously, the post is in reality the best on this laudable topic. I harmonise with your conclusions and will thirstily look forward to your incoming updates. Saying thanks will not just be sufficient, for the great lucidity in your writing. I will instantly grab your rss feed to stay abreast of any updates. Fabulous work and much success in your business efforts!

  41. istanbul kurye says: Dec 29th, 2009

    we have benefited a lot as the best courier companies thanks. nice sharing

  42. betsson509 says: Jan 1st, 2010

    thanks

  43. View Private MySpace Pictures says: Jan 2nd, 2010

    Awesome blog entry — I will be coming back more often to read your other entries.

  44. Thaddeus Dibernardo says: Jan 3rd, 2010

    Thanks! I’ve been searching for this info all day now. My dell is not running like used to and I need to figure out how to fix it asap. I have bookmarked your blog so others like me can find it 2 on digg.

  45. Scoruri Live says: Jan 6th, 2010

    Well worth the read. Thanks for sharing this information. I got a chance to know about this.

  46. Plasma TV kopen says: Jan 8th, 2010

    Interesting new post. Even better than your previous ones IMHO ;)

  47. horlama says: Jan 10th, 2010

    Thanks! I’ve been searching for this info all day now. My dell is not running like used to and I need to figure out how to fix it asap. I have bookmarked your blog so others like me can find it 2 on digg.

  48. Self Esteem says: Jan 11th, 2010

    Thank you so much, there aren’t enough posts on this… or at least i cant find them. I am turning into such a blog nut, I just cant get enough and this is such an important topic… i’ll be sure to write something about your site

  49. John Thompson says: Jan 11th, 2010

    This is a very good background check service. I took their trial and they still let me do unlimited searches on anyone. Unfortunately, I had no idea my brother-in-law had so many driving violations. I should probably stop snooping.

  50. Self Esteem says: Jan 13th, 2010

    Thank you so much, there aren’t enough posts on this… keep up the good work

  51. Lucinda Buffy says: Jan 16th, 2010

    I liked your post alot. I recently started college and in need of some money. Ive never seen this before but it seems very promising and Im going to give it a shot. Thank you so much!

  52. Sample Hardship letter says: Jan 17th, 2010

    Great post! keep them comin… thanks for all your hard work.

  53. View Private MySpace Pictures says: Jan 18th, 2010

    Awesome! looking forward to seeming some more entries from you..

  54. how to win at blackjack says: Jan 18th, 2010

    Hi, maybe our post could be off topic but anyways, Having been surfing around your web site and it seems very awesome. It is obvious you know your subject and you are passionate about it.

  55. Blogcu says: Jan 23rd, 2010

    This is a very good background check service. I took their trial and they still let me do unlimited searches on anyone. Unfortunately, I had no idea my brother-in-law had so many driving violations. I should probably stop snooping.

  56. amatör sesler says: Jan 23rd, 2010

    Thank you, nice article.

  57. oyun oyna says: Jan 23rd, 2010

    Well worth the read. Thanks for sharing this information. I got a chance to know about this.

  58. Sağlık Videoları says: Jan 23rd, 2010

    good post, thanks admin

  59. sex partner says: Jan 24th, 2010

    Great post! keep them comin… thanks for all your hard work.

  60. Raphael Spurrier says: Jan 26th, 2010

    I was just looking at relevant blog posts for the project research and I happened to stumble upon yours. Thanks for the valuable material!

  61. korkufan says: Jan 27th, 2010

    good post thanks admin

  62. Jamar Medrano says: Jan 28th, 2010

    Have you ever considered adding additional videos to your blog to keep the viewers more involved? I just read through the whole article and it was very nice but since I am more of a visual learner, I find videos to be more helpful. I like what you guys are always up too. Keep up the excellent work. I will return to your website on the regular for some new post.

  63. Katie says: Jan 28th, 2010

    Hi Jamar,

    Thanks for the suggestion about adding additional videos! I will keep that in mind for the future blogs.

    -Katie

  64. Selma Marreo says: Jan 29th, 2010

    How did you get to learn so much about that? did you go school for it or just a self learning process?

Leave a Reply

Your email address will not be published.


four + = 9

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>