The allure of advertising revenue: should your store participate?

Posted by Siobhan Hitchmough
advertising revenue

Recently there was an editorial on Inc.com lampooning the ad supported Kindles being released by Amazon. Renee Oricchio postulates that with the release of this type of e-reader, other manufacturers will follow suit. The implication of course being that very soon we will find ourselves having to close the type of floating ads that currently chase us across our online content while reading the latest Tom Clancy novel or trying to enjoy our morning electronic newspaper. And it got me thinking: have we not seen this phenomenon before?

Recently there was an editorial on Inc.com lampooning the ad supported Kindles being released by Amazon.  Renee Oricchio postulates that with the release of this type of e-reader, other manufacturers will follow suit.  

The implication of course being that very soon we will find ourselves having to close the type of floating ads that currently chase us across our online content while reading the latest Tom Clancy novel or trying to enjoy our morning electronic newspaper.  And it got me thinking: have we not seen this phenomenon before?


Many of the apps available in the apple store and those available for the Android operating system now have free versions and paid versions.  In many cases the free versions are supported by adverts, which are removed in the paid versions.  Is this effective marketing?  In some cases we find that the apps which follow this model do quite well (see anything involving the Angry Birds).  Gizmodo writer John Herrman shares that “top 100-ranked free apps can make $400-$5000 a day.”  This of course suggests that the purchase of the full app may not be what’s driving the app writers to create the free edition, relying instead on the revenue from the ads themselves.  The unfortunate conclusion being that these apps then become nothing more than a clever delivery system for adverts you’d otherwise avoid.

Is this really the way to engender brand loyalty that we want in our customers?   And how does this apply to your online store?  While some stores choose to remain free of advertisements (eg. Etsy.com), others feel that providing access to items which might appeal to you (based on the page you’re visiting or search terms you’ve used) could be beneficial (eg. Ebay, Gmail).  Ultimately you may break even on customer annoyance vs. subsidies if you were to incorporate adverts in your e-store but the reality is that adverts online and in our devices are probably here to stay…for better or for worse.

Resources

Herrman, John. “Report: Popular Ad-Supported iPhone Apps Actually Make a Killing.” Gizmodo.com. May 6, 2009. May 3, 2011. < http://gizmodo.com/#!5242204/report-popular-ad+supported-iphone-apps-actually-make-a-killing >

Lowensohn, Josh. “How apps stay on top in the App Store.” News.Cnet.com. May 2, 2011. May 3, 2011. < http://news.cnet.com/8301-27076_3-20058702-248.html >

Oricchio, Renee. “Yuck: Ad-Subsidized Kindles.” Inc.com. April 12, 2011. May 3, 2011. < http://www.inc.com/tech-blog/yuck-ad-subsidized-kindles.html >

Siobhan Hitchmough

About Siobhan Hitchmough

Siobhan Hitchmough is a customer advocate, community manager and part-time tutorial wrangler. When she's not seeking out new challenges she leads the community and support team at inFlow Inventory.

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