The Long Tail of Business Models: Market Maker in Ad Exchanges
Chris Anderson and Fred Wilson are building what they call the “Long Tail of Business Models” today on each of their blogs. Among the business models I would logically suggest (in that I work on ADSDAQ) is the “market maker” business model of ad exchanges.
Ad exchanges such as ADSDAQ, Yahoo!’s RightMedia and Google’s DoubleClick AdX ad exchange provide a market for buyers and sellers of online advertising to efficiently buy and sell online ad inventory. As is the case with ADSDAQ, the ad exchange makes its ‘cut’ as a market maker by effectively earning the difference between the advertiser’s BidPrice and the seller’s AskPrice.
As of right now, the growing list of “Long Tail of Business Models” on Chris and Fred’s blogs include:
From Chris Anderson:
- CPM ads (”cost per thousand views”; banner ads online and regular ads in print, TV and radio)
- CPC ads (”cost per click”; think Google ads)
- CPT ads (”cost per transaction”; you pay only if the customer brought to you from a media sites becomes a paying customer. Here’s an example.)
- Lead generation (you pay for qualified names of potential customers)
- Subscription revenues
- Affiliate revenues (think: Amazon Associates)
- Rental of subscriber lists
- Sale of information (selling data about users–aggregate/statistical or individual–to third parties)
- Licensing of brand (people pay to use a media brand as implied endorsement)
- Licensing of content (syndication)
- Getting the users to create something of value for free and applying any of the above to monetize it. (Like Digg or our own Reddit
- Upgraded service/content (ed: aka “freemium”)
- Alternate output (pdf; print/print-on-demand; customized Shared Book style; etc.)
- Custom services/feeds
- Live events
- “Souvenirs”/”Merchandise”
- Co-branded spinoff
From Fred Wilson:
- Cost Per Install (popular with top Facebook apps who can help others get installs)
- E-commerce (selling stuff directly on your website)
- Sponsorships (ads of some sort that are sold based on time, not on the number of impressions)
- Listings (paying a time based amount to list something like a job or real estate on your website)
- Paid Inclusion (a form of CPC advertising where an advertiser pays to be included in a search result)
- Streaming Audio Advertising (like radio advertising delivered in the audio stream after a certain amount of audio content has been delivered)
- Streaming Video Advertising (like streaming audio but in video)
- API Fees (charging third parties to access your API)
Dave McClure has also added a few Facebook ‘potential’ business models on his blog. If you use Del.icio.us, check out the tag “webbusinessmodels” for all applicable posts in the blogosphere.
-- John Ebbert
Sphere It