Mike Rundle of 9rules has written a post on traffic, and b5media’€™s traffic in particular. It’€™s gotten a little heated in the comments, pies flying all over the place, but it’€™s still a good read for everyone that’€™s been thinking about stats and what they actually mean. You won’€™t find any truths, but if you didn’€™t have any doubts regarding stats before you’€™ll definitely get some.
And yes, that’€™s old news.
What got me thinking is Rundle’€™s second paragraph, where he rants a bit about Digg having trouble selling ads. I found this interesting:
The only companies that can afford to run ads on Digg are those with gigantic advertising budgets, and the companies with gigantic advertising budgets go for more mainstream sites that have a more proven return on investment.
So if the poster child for “Web 2.0″ has trouble selling advertising, and “Web 2.0″ is all about giving services away for free and selling ads (tongue in cheek), what hope is there for the rest of us?
Is that an actual problem? Can you get too big? Obviously you can mass up to many costs and not afford to run your site, but could you actually be so successful that the advertisers will shy away from your “reasonable pricing”?
Of course. Growth problems in a company is only natural, and the same goes for websites. During the period when you get too big (Digg right now according to Rundle) you’€™ll outgrow your regular advertisers ‘€“ they just can’€™t afford you. I’€™ve been in that situation myself with previous projects, where 70% of the revenue came from set priced ads meant for retailers. We got big, had to adjust the ad pricing ‘€“ and the retailers where gone, as was most of our revenue!
What you need to do is adjust to your growth rate. Analyze your advertisers so that you can phase in new possible revenue streams when you become interesting to them. That’€™s what we did, and it worked out great in the end. (The dotcom just about killed us, but that’€™s another story.)
So no, I don’€™t really think you can get too big. It’€™s just a matter of business strategy, and if you’€™re lacking that you’€™ll probably never get the being to big-problem anyway. However, I think you can monetize more per visitor if you’€™re in a position to chop up your website in smaller portions, which in turn can continue to grow. Let’€™s say you have an entertainment blog writing about music, movies and celebs – and you make it big traffic-wise! You might consider splitting the blog into three separate, but related, blogs and therefore still attract the same kind of advertisers as you did before you got too big and expensive. At the same time you can offer bigger players the option of advertising over the blogs in a nifty little package. So that would be a way to tackle the growth problem, but it won’€™t work for everyone obviously.
Hey, I think I just invented the blog networks all over again.
To make a long story short. Mike Rundle needn’€™t worry about “the rest of us making money” ‘€“ if we just sit down and think our business strategy through we’€™ll cope just fine.