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Membership Option for Site

Posted on 2006-07-14
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Last Modified: 2012-08-13
Hi all,
I working with a site that will lanuch in a few weeks and need advice about the best method to make revenue. I could either charge members a small fee annually after a trial membership period or not charge members at all and rely on ads on the site as the only form of revenue. I'm new at this so really have very little idea if the second option is feasible? I know many online companies (i.e. bebo.com) make large profits from online advertising alone but where could I get an estimation of such figures?
Any help would be greatly appreciated,
Thanks,
D
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Question by:dereksheahan
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by:Autogard
ID: 17108605
A good option is to offer a free service which has ads (so you generate revenue through ads) and then also have an upgraded membership without ads that they would pay for monthly/annually.  Come to thing of it, that's sort of how EE works too (once you earn or pay for your premium services the ads shut off).

>>where could I get an estimation of such figures?
The IAB might help (http://www.iab.net).
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by:Autogard
ID: 17108649
...as for which method is better -- I think it depends on what type of service/site you are launching because what audience/customer base you have will make a huge difference.  A good question is, how likely are the people in your customer base going to want to/be able to pay for your service.  Take a look at many of the subscription services out there that are somewhat related to the one you have and see how they do things.  Then see what things are good about the way they do things and what things aren't so good.  That should help you make a decision.
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Author Comment

by:dereksheahan
ID: 17108793
Hi,
The site allows users to search for tradesmen in their area. Therefore we were thinking of charging the tradesmen a small fee annually and letting the public search it free of charge. The only thing we want to get as many trademen signed up as possible so not sure if it would be possible to rely on advertising alone and not charge them.
If anyone has any ideas are good links I'd love to hear them!
Thanks,
D
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by:Autogard
ID: 17108896
Seems to me like it is a great idea to charge the tradesmen to be listed (since they are the ones that will be getting business as a result) and to provide the service free to the public to search (since I don't think many people will pay just to search to find a tradesman).  Ad revenue is a great option in that case as long as it's done right.  Sounds like you are on the right track, but that's just one opinion.
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Expert Comment

by:OliWarner
ID: 17110190
The problem with a listing fee is you need people listed for anyone to be interested in searching your database... And people wont pay to be listed if there's nobody searching your databases.

Therefore I would suggest the following strategy:

Starting off with free listings, free searching, etc. All free. Just a couple of adverts.

When you've got a "decent" number of people listed and you've got some traffic, start offering something like a "30-day free trial" where people can get listed once for 30 days and if they decide they like it, they can subscribe with you to continue.

If numbers start to dive at any point, you might need to think about coupon-ing out 3month trials and advertising on other sites/adsense.

You can spice the prices for subscriptions up by going the "eBay" route and offering services like allowing them to put a picture or logo up, or letting them have their listing in bold/colour/etc.


From the advertising side of things, you need millions of visitors a day to get any decent return back. Certainly if you're more than one person doing this and needs to be supported off the revenue.
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by:Autogard
ID: 17110218
Good points OliWarner.
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Author Comment

by:dereksheahan
ID: 17114112
Thanks guys for your insightful comments. Yeah, we were thinking of operating it like this: Having a free 6 month trial period for all tradesmen where not even credit card details are asked for. Then after this period of time (maybe longer depending on the figures) have an official trial period start. In this period we would set up a counter to check how many times an individual trademan's contact details have been searched. When this counter reaches a certain number then an email will be sent saying you need to become a full member to continue to avail of our services.
OliWarner, as you correctly pointed out the problem is at this point many of the tradesmen may opt out and not pay for use of the site. If we require millions of visitors per day to generate any revenue (where could I get figures on this?) then we'll be in trouble as realistically that won't be happening.
I'll leave the post open for other suggestions for a while.
Thanks so much,
D  
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OliWarner earned 500 total points
ID: 17114146
>> where could I get figures on this?

You cant. I'm contractually forbidden to tell you my CPM rates from adsense. If you generate enough traffic though (I think the minimum is talking about 100,000 uniques a day) you can sign up with "proper" advertising publishers like doubleclick and they will be able to give you a fair and constant rate based on pageviews instead of clickthroughs.

I'm not saying adsense (or any other CPC publisher) doesn't pay anything... Just that adsense doesn't pay that much unless you have a lot of traffic to click your adverts.


Whatever you do about advertising, you're going to have to invest quite a lot of time and money on marketing this beast. I would avoid doing this until you've got a few people listed and then go all out on the advertising front and see how that does.

I like your idea on the counter though.. That sounds like a good fair way of doing a trial, but may make it last too long if you don't have enough people trying to contact them.
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