Chickens, Eggs, and Web 2.0 Business Models
Joe Marchese had a great post yesterday regarding the “build it and they will come” ad revenue strategy of most Web 2.0 start ups (e.g., build traffic and the advertisers will come). I totally agree with Joe that if advertising is going to be your primary revenue stream, it should not be an afterthought; it should be a central part of your strategy.
We’ve taken this lesson to heart at Jellyfish. Our Smack Shopping Show was created to make advertising an integrated part of the show content rather than an interruption. In fact, Smack Shopping is one big advertisment, but end users view it as entertainment. I attended the recent OMMA show Joe mentions in his post and much of the discussion was centered on this theme. We think this kind of engaging advertising will be a big part of the future of advertising on the web.
The challenge for companies like ours is scale. It is the classic chicken and egg challenge that many Web 2.0 start ups face in trying to convince major advertisers that experimenting with new advertising formats and smaller, more engaged audiences is the future. It hasn’t been easy, but Jellyfish is finding initial success with several advertisers. We’ll be working hard in the upcoming months to show that starting with a sound advertising revenue model is a great recipe for success.