Losing free web services in a recession
August 20th, 2008 | by mbhunter |If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
I was chatting with family a couple of weeks ago and he was recalling how tiny the content window was on one of the services he uses. There was this little window that had everything he wanted to see, and the rest of the screen was plastered with ads. Then he turned the discussion to the ads and asked, "What would happen if all of the ads disappeared from the Internet? Would you have an Internet?"
That’s an interesting question. If you’re reading this blog, you’re reading it for free, and advertisers (ads and affiliate links) pay the bills and put a (modest) side income in my pocket. If you’re reading it in a feed reader, you’re probably reading it for free, too, and there’s likely an ad somewhere you can see it as you read. Free e-mail. Free news. Free games. Free video uploads. Free teleconferencing. They’re all advertiser-supported.
What if the ads disappeared? If they disappeared for any length of time, some of these free services would cease.
I just signed up for Pandora a few weeks ago, and darn it if it isn’t in danger of shutting down. Its performance fees went up dramatically, so the advertiser-supported model they had doesn’t work as it did. In this case the advertisers are still there but they’re just not up to ponying up what it will take to keep the site afloat and worthwhile for the owners.
A recession means fewer sales for business, and less income. One place that eases the pain of a shrinking bottom line instantly is a cutback on advertising. Keyword bidding competition isn’t as high. Advertisers don’t renew the deals, or negotiate harder.
If the advertising income falls short of putting food on the table and paying the bills, then the content provider has a problem. Every day their sites are online costs them money. Why keep them up? They don’t.
I’m not closing up shop. No need to thank (or curse) me. ;) The main reason for this is that it’s not my primary income; if I only earn $5 one month, it’s not going to put me on the street. I can wait it out. For others, $5 one month (or even just $500 one month) will send them looking for a paycheck, and their sites will go on hold or stop. So some of your favorite services might go away, or at least there will be fewer choices of things to get for free.
4 Responses to “Losing free web services in a recession”
By Kem on Aug 20, 2008 | Reply
I read your post as a feed in my google reader, sans ads. I wonder how long it will take for advertisers to realize that many regular readers of popular blogs read content off-site and thus rarely encounter ads.
By Cheapo on Aug 20, 2008 | Reply
I agree with you that more and more free web services are becoming scarce due to the economy. If you think about it this not only applies to the web, but other sectors as well. For example Sprint used to offer a great cell phone plan which included many free features for only $30. Now Sprint does not offer a plan that cheap and instead has increased the price for such a comparable plan. The plan was a way to get more subscribers, but with the plan not being available anymore I am sure people are now looking at all of their options.
By Steward on Aug 21, 2008 | Reply
It might be that a recession could be better for some types of people who make money from advertising online - maybe people will be more willing to put money into cheaper advertising alternatives than TV adds or news papers. I am by no means in marketing, but it seems possible to me.
By Andrew on Aug 26, 2008 | Reply
I admit that I may be the exception, but I liked the internet (or more to the point of the article, the world wide web) just fine before everyone started pasting up advertising everywhere.
…and we typed our markup code into vi, walked uphill 3 miles both ways in the snow to get to the university computer lab, and we liked it by gad — now where did leave my teeth?