Can Dogster Teach the Web2.0 Any New Tricks?

Filed as Uncategorized on September 15, 2006 12:19 am

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Today one of the memes reverberating around the blogosphere has been how Dogster, the social network for dogs, has received 1 million dollars in angel financing. Without belabouring the details, Dogster started in 2004, and has currently built itself to over 200 000 active users, but according to an interview at VentureBeat, it has already been profitable. How profitable? How about to the tune of $100 000 in the month of April alone.

It seems like the road to profitability seems like an attempt to both keep costs low, but as well, create a diversified revenue model. That is, more than just relying on Google Adsense.

In a 2005 blog post he does mention, for example, how he did achieve profitability:

However, we offset that and then some thanks to higher than expected revenues for site sponsorship, CPM advertisers, boutique advertisers, bulk advertising, paid user subscriptions as well as our revenue from store sales and pet-friendly travel bookings.

Diversification of revenue streams in terms of paid user subscriptions, product sales, and services are all part of the revenue mix. Indeed, even amongst the advertising schemes, it seems that Dogster is using ingenuity to come up with
more lucrative advertising packages that benefit both themselves as publishers, and the companies paying to advertise.

According to Venturebeat:

It is making money through creative advertising packages. Disney paid for a campaign around Lady and the Tramp, and at first said it wanted to buy a $13,000 banner ad. Rheingold warned Disney it might not be happy with such an ad, because it didn’t mesh with other parts of the site’s main activities. For a banner to be appreciated, he suggested, Disney might want to advertise all over Dogster’s site, from newsletters, to the messages Dogster sends to new members — and also let members talk with Lady and with Tramp — all so that the Lady and the Tramp branding could be better understood in the overall context of the site. Disney agreed. There was even a flat-screen TV contest. After the experience, Disney pledged to make the Dogster site a preliminary campaign for all dog-related movies, Rheingold said.

It looks like Dogster has been able to offer a more diverse package not just because of a little chutzpah, but because their
own diversity of content and the way they’ve been able to deliver it.

What’s the take home message? I think its how Dogster has not just been able to monetize the “website” or “their traffic” — but how its been able to monetize their community.

When you have a group of fans that are incredibly passionate and crazy about a topic, and you do well by them by providing a great service (in this case, its raison d’etre, the social networking aspect of dogster), it is much, much, easier to create revenue by actually selling stuff to them.

Its more than just “traffic”.

And selling isn’t a dirty word — in this case, Dogster is providing products or services that their community actually wants. It succeeds in doing so because Dogster isn’t a e-commerce site first. Its a social networking site first. Or at least, that’s what it seems. At the end of the day, its focus is no more than on social networking site than television is on producing high art.

A mercenary view of things is that television is really just a way to get people in front of a box so advertisers can bring their message across. What happens between commercials are just details. Similarly, one could think of Dogster in a similar way.

Social networking in a topic people have a passion for may have gotten people through the door, and gotten them to be happy to stay; but Dogster’s done more. Its done a great job of both providing happy solutions to their wants and needs — and their community is happy to pay for it.

Dogster has already done a profitable job soliciting and creating imaginative advertising packages, but Dogster’s done more than just ads; but in creating and cultivating a vibrant community it looks like its products and services are no joke. They look like they’re putting Dogster over the top in terms of profitability.

Dr. Tony Hung writes about blogging, web2.0 and social media. He lives over at DeepJiveInterests.com.

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