Native Monetization vs Ad Supported Revenues


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Which companies are faring better? Companies that are ad revenue based or ones that users actually value enough to pay for directly - native monetization?

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  • This couldn't be more wrong. Zynga and Groupon are NOT ad-suported. Groupon is clearly an e-coomerce or m-commerce company, the transaction is the core, the content is the deal itself so it is native monetization in every sense of it. Zynga is supported by virtual goods which are not interruptive but fit in the game context. This is again native monetization. The overall premise that native monetization is better is correct but the rationale given and the way Zynga and Groupon are used is incorrect. Zynga and Groupon are not suffering because of nativ or non-native monetization but because of more fundamental issues.
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Native Monetization vs Ad Supported Revenues

  1. 1. Native Monetization is Always Better than Ad Supported Dr. Augustine Fou @acfou Marketing Science Consulting Group, Inc. New York, NY 646 867 0826July 23, 2012 1
  2. 2. Ad-supported companies WBMD -68% since May 2011 peak click GRPN -72% since Nov 2011 peak click ZNGA -65% since March 2012 peak click P -48% since July 2011 peak click DMD -58% since April 2011 peak click FB -25% since May 2012 peak clickJuly 23, 2012 2
  3. 3. LinkedIn (LNKD) performance LNKD +10% since IPOJuly 23, 2012 3
  4. 4. 1-Year Side-by-Side Comparison LNKD +9% FB -27% P -30% DMD -23% ZNGA -68% WBMD -69% GRPN -73%July 23, 2012 4
  5. 5. LinkedIn Revenue by Product Source: Company Filing 10-K March, 2, 2012 Native monetization revenues (hiring solutions, premium subs) = 70% Advertising / Marketing Solutions = 30%July 23, 2012 5
  6. 6. Revenue per Time Spent LNKD $1.30 per user/hour FB $0.06 per user/hour HBO $0.28 per user/hour GOOG $0.35 per user/hour Financial Times $3.66 per user/hour Source: Forbes, July 26, 2012July 23, 2012 6
  7. 7. So What? “Of all the Internet IPOs recently, only LNKD has held up; its „native monetization‟ revenues (70% of revs) means people find it valuable enough to actually pay for, versus ad-supported sites. Try to find native monetization companies.” - Dr. Augustine FouApril 25, 2012 7
  8. 8. Dr. Augustine Fou – Chief Digital Strategist Dr. Augustine Fou is an industry-recognized thought leader in digital strategy, search and social media marketing and former Group Chief Digital Officer of Omnicoms Healthcare Consultancy Group. Dr. Fou has over 16 years of management consulting and digital strategy consulting experience, advising CMOs, marketing executives, and global brands. He helps clients make the transition from “traditional” advertising to marketing that is optimized for the new digital world. MCKINSEY CONSULTANT CLIENT SIDE / AGENCY SIDE EXPERIENCE PROFESSOR AND COLUMNIST ENTREPRENEUR / SMALL BUSINESS OWNER PHD MATERIALS SCIENCE (MIT 95) AT AGE 23 ClickZ Articles: Slideshares: LinkedIn: 23, 2012 8