Paying for the Web

[Robert Maxwell]

As the Web increases in popularity, hosting costs for high-traffic sites have skyrocketed. If you're a large corporation, you can afford these easily, and consider them a cost of doing business. If the costs outstrip the benefits the site provides, you get out of the Web business.

If, however, your business is entirely Web-based, then what? Or say you aren't even a business, just a Joe Sixpack running a popular site? You need revenue.

To date, most sites make money from ads. In the early days of the Web, you primarily had buttons and banners. Some were static, many were animated. They were not altogether intrusive, though, and sites tended to only have one or two banner ads, rather than a collection of ads sprinkled all over the page.

Flash and JavaScript, of course, have brought us to today: ads that can splash over the whole page, cover up the content you want to read, full-page ads you have to click through, text ads embedded in the content itself, etc. The ads have become more intrusive and obnoxious, and even top-tier ad servers don't adequately vet the ads they serve, resulting in the proliferation of spyware, viruses, and worms.

Users have responded by resorting to ad-blocking technology. The most popular is a plugin for Firefox that shall remain nameless. This has had a crippling effect on many sites--revenues are down even though traffic is up. Even TrekBBS, despite its growing traffic, has seen ad revenues decline because of people using blocking software.

This is not a minor problem. It threatens the very survival of the sites we visit. Some sites have taken measures to combat this, such as displaying messages to users who block ads that they are stealing bandwidth. Others have taken a more extreme position, outright banning users who use or even discuss ad-blockers. In general, administrators of such sites face a major backlash from their user base, and end up relenting before too long. But the problem remains.

Other models have proven less successful. Voluntary micropayments was a concept tried by TipJoy--which folded last year for lack of funding. Other micropayment systems have met with slightly more success, but in general the micropayment paradigm has been a failure. I know of no major sites (50,000+ unique visitors per month) that are supported in whole or in part through micropayments and not supplemented by ads.

Some sites, including TrekBBS, offer a "premium membership" option where you pay a recurring fee and don't have to look at ads. Ironically, the people who are attached enough to a site to pay for a premium membership will tend to use up more bandwidth than their membership fee covers, so it may not be a profitable proposition for many sites. Again, I do not know of any large sites that rely primarily on this model.

Finally, there is the "walled garden" model. This has worked only for niche sites with high-quality, specialized content. Think scientific journals, legal information, investment data, and so forth. This approach, then, only works for communities where the audience is both wealthy and expert. Mass-media sites have tried to use this model in the past and have failed miserably, because their content is neither unique enough nor specialized enough.

So, what to do? The continuing rise of ad-blocking will cripple, if not destroy, ad-based sites on the Web. But no other model has proven as effective thus far.

How will we pay for the Web? How will our favorite sites survive?

 

[Tom Hendricks]

I don't mind ad's that are not intrusive. However the ad's you speak about, the ones that cover content and muck up your surfing are really irritating. I have on several occasions considered not coming to TREKBBS because of the intrusive ad's. I consider these ad's just like the little booths in malls, you know the ones who have lotions and heating pads. They assault you as you walk thru the mall, I hate that. So when they approach me, I ask "When are you going out of business?" If I was interested in your product I would come over to you, otherwise leave me alone. This is how I feel about the obnoxious ad's. Even if I was interested in the product, I would never click on the link. I would just google it and proceed. I want to hurt that website as much as possible.

 

[FordSVT]

Welcome to the Internet, where everything your heart's desire is expected to be created on a whim by other people and enjoyed at absolutely no cost. If it's not worth buying it's not worth stealing, and if it's worth buying the price is too expensive and it gets stolen anyway.

Newspapers and magazines are supposed to adapt to new revenue streams via the internet, television is supposed to adapt to new revenue streams via the internet, but I'm not exactly sure what the Internet itself is supposed to do for money.

Is it possible for a website to check to see if a browser has an ad-blocker and then prohibit them from entering a website? If every website did that.... then again someone would just come up with another add-on that would hide the blocker. Repeat.

 

[farmkid]

I don't mind ad's that are not intrusive. However the ad's you speak about, the ones that cover content and muck up your surfing are really irritating. I have on several occasions considered not coming to TREKBBS because of the intrusive ad's. I consider these ad's just like the little booths in malls, you know the ones who have lotions and heating pads. They assault you as you walk thru the mall, I hate that. So when they approach me, I ask "When are you going out of business?" If I was interested in your product I would come over to you, otherwise leave me alone. This is how I feel about the obnoxious ad's. Even if I was interested in the product, I would never click on the link. I would just google it and proceed. I want to hurt that website as much as possible.

I agree. I don't mind banners and other static ads. It's the flash ads that cover the content that really piss me off. I think such ads are counter-productive because, like you, I'll refuse to click on the ad even if I'm interested just because it pissed me off. I also hate the ads that pop up when you move the cursor over the highlighted text. I tend to somewhat follow along what I'm reading with the cursor, so when those pop up right over what I'm reading, it really pisses me off.

I really think that if advertisers want people to click on the ads, they should try not to aggravate the potential customers.

 

[Jadzia]

If we come up with a cool idea for reducing costs, then that idea would be very popular, and would spread globally.

But if all websites could then run more economically, (eg, with a lower bandwidth, or finding a completely new and rich source of revenue), then web hosts would simply charge more per gigabyte, or more per annum, knowing that site owners were then better able to afford the higher costs.



What if web hosting prices were government regulated?

What if domestic bandwidth increased enough that people could run a moderately large website from a computer in their own home?

 

[Robert Maxwell]

I don't mind ad's that are not intrusive. However the ad's you speak about, the ones that cover content and muck up your surfing are really irritating. I have on several occasions considered not coming to TREKBBS because of the intrusive ad's. I consider these ad's just like the little booths in malls, you know the ones who have lotions and heating pads. They assault you as you walk thru the mall, I hate that. So when they approach me, I ask "When are you going out of business?" If I was interested in your product I would come over to you, otherwise leave me alone. This is how I feel about the obnoxious ad's. Even if I was interested in the product, I would never click on the link. I would just google it and proceed. I want to hurt that website as much as possible.

This is the exactly the sort of problem I'm talking about. Websites cannot survive if this is how people react. Site owners are often caught in the middle--they have users to please, and advertisers to please. The advertisers want their ads to be as noticeable as possible, in order to get your attention. What they don't realize is that this is obnoxious to the end-users. So, when they see the ads not working, they assume they aren't in-your-face enough and ramp it up even more. Users get pissed and start blocking. Rinse, repeat, escalate.

There has to be a breaking point somewhere where the ad model snaps entirely.

Welcome to the Internet, where everything your heart's desire is expected to be created on a whim by other people and enjoyed at absolutely no cost. If it's not worth buying it's not worth stealing, and if it's worth buying the price is too expensive and it gets stolen anyway.

Newspapers and magazines are supposed to adapt to new revenue streams via the internet, television is supposed to adapt to new revenue streams via the internet, but I'm not exactly sure what the Internet itself is supposed to do for money.

Is it possible for a website to check to see if a browser has an ad-blocker and then prohibit them from entering a website? If every website did that.... then again someone would just come up with another add-on that would hide the blocker. Repeat.

Yes, if a site is serving its own ads, they can tell if your browser requested them. However, some ad-blockers are smart enough to actually request the ad but never display it. Unless the ad code sets a cookie or something, there is no way to know if someone pulled down an ad but never viewed it. Still, it is usually enough to target the people who view pages but never request ads. Sites that do this end up getting a huge backlash from their users, as I described in my original post, so it's not a good solution. Pissing off your users doesn't work!

I don't mind ad's that are not intrusive. However the ad's you speak about, the ones that cover content and muck up your surfing are really irritating. I have on several occasions considered not coming to TREKBBS because of the intrusive ad's. I consider these ad's just like the little booths in malls, you know the ones who have lotions and heating pads. They assault you as you walk thru the mall, I hate that. So when they approach me, I ask "When are you going out of business?" If I was interested in your product I would come over to you, otherwise leave me alone. This is how I feel about the obnoxious ad's. Even if I was interested in the product, I would never click on the link. I would just google it and proceed. I want to hurt that website as much as possible.

I agree. I don't mind banners and other static ads. It's the flash ads that cover the content that really piss me off. I think such ads are counter-productive because, like you, I'll refuse to click on the ad even if I'm interested just because it pissed me off. I also hate the ads that pop up when you move the cursor over the highlighted text. I tend to somewhat follow along what I'm reading with the cursor, so when those pop up right over what I'm reading, it really pisses me off.

I really think that if advertisers want people to click on the ads, they should try not to aggravate the potential customers.

You can say this until you are blue in the face, but the advertisers are not listening. They will run the industry into the ground before they give up escalating the aggravation their ads cause.

In any case, I didn't start this thread to discuss how to save the ad-based model. The answers to that are obvious but nobody cares. Intrusive ads are here to stay and only getting worse, which prompts more and more people to block them. Once a blocker is turned on, it is rarely deactivated. So, sites that depend on ad revenue are going to have to find another solution. What could it be?

If we come up with a cool idea for reducing costs, then that idea would be very popular, and would spread globally.

But if all websites could then run more economically, (eg, with a lower bandwidth, or finding a completely new and rich source of revenue), then web hosts would simply charge more per gigabyte, or more per annum, knowing that site owners were then better able to afford the higher costs.



What if web hosting prices were government regulated?

What if domestic bandwidth increased enough that people could run a moderately large website from a computer in their own home?

Hosting prices have plummeted in the last 10 years. Margins on web hosting are very thin, so I don't think your scenario would come to pass. An Internet with virtually-free bandwidth would essentially eliminate the whole problem. ISPs would also have to amend their policies so people can run high-traffic servers from their own homes, which is currently forbidden by just about all major ISPs.

The problem is not that bandwidth is more expensive, but rather that usage patterns have necessitated sites require more bandwidth. The explosion of the user base is also a big factor. Your niche site may have had a few hundred regulars 10 years ago, but now it has thousands. Bandwidth costs have gone down, but not so much most people could afford a site the size of TrekBBS. With streaming video, larger images, and more complex code, bandwidth requirements have only gone up, and they're rising much faster than bandwidth prices are falling. Text compression is pretty efficient, but the real bandwidth hogs are videos. On the other side of this, you have CPU and memory requirements--a large, interactive site is going to need beefy hardware, and that doesn't come cheap. Again, the prices have come down, but not enough to offset the explosion of users and the complexity of the software.

I don't know, maybe it's just a waiting game--sooner or later, the growth of Internet users will slow down and essentially keep pace with population growth; hardware will advance to the point where you can run a complex site on very low specs; bandwidth will cost next to nothing. But that might take 10, 20 years, and sites are suffering from revenue drops now. I wonder what solutions we'll see in the interim.

 

[John Picard]

Welcome to the Internet, where everything your heart's desire is expected to be created on a whim by other people and enjoyed at absolutely no cost. If it's not worth buying it's not worth stealing, and if it's worth buying the price is too expensive and it gets stolen anyway.

Newspapers and magazines are supposed to adapt to new revenue streams via the internet, television is supposed to adapt to new revenue streams via the internet, but I'm not exactly sure what the Internet itself is supposed to do for money.

Is it possible for a website to check to see if a browser has an ad-blocker and then prohibit them from entering a website? If every website did that.... then again someone would just come up with another add-on that would hide the blocker. Repeat.

QFT.

 

[Mr. B]

If, however, your business is entirely Web-based, then what? Or say you aren't even a business, just a Joe Sixpack running a popular site? You need revenue.

Why? How expensive is the popular joe sixpack site to operate? If you're Engadget your costs are rediculous and apparently there is enough unwashed traffic clicking on the ads. If your traffic is under a terabyte per month you can get a dedicated hosting account for $100 /month. As has been mentioned already, the same amount of money will buy even more capacity in the future.

If you're an actual business selling products, operating the website is just part of the cost of doing business.

It's unfortunate internet ads have become so intrusive that there is a huge demand to block them... but that's the way it is. Advertisers dish out crap and guess what, it's my computer and I get to choose what servers I download content from. If a site is hosting their own ads rather than dealing with doubleclick or some such service, there's a much higher likelihood nearly every user will see them.

 

[Robert Maxwell]

If, however, your business is entirely Web-based, then what? Or say you aren't even a business, just a Joe Sixpack running a popular site? You need revenue.

Why? How expensive is the popular joe sixpack site to operate? If you're Engadget your costs are rediculous and apparently there is enough unwashed traffic clicking on the ads. If your traffic is under a terabyte per month you can get a dedicated hosting account for $100 /month. As has been mentioned already, the same amount of money will buy even more capacity in the future.

Depends on the popularity of the site in question. If you have hundreds of concurrent users, your primary bottlenecks are going to be computing power and bandwidth. A 10Mbps connection isn't going to cut it. It's not just the total amount of traffic, but how much of it you are dishing out at once.

For instance, let's say your site has 200 concurrent users, and they're all trying to download a 5KB page at the same time. That's going to saturate your 10Mbps pipe right there, and that's not even accounting for higher-payload items such as images. Assuming it's a dynamic site like TrekBBS, there's going to be overhead for every PHP session, too. Your average VPS would be brought to its knees under such conditions. Let's be generous and assume each PHP session is using up 5MB of RAM, you're looking at a gigabyte of RAM consumption for those 200 members, and that's not even including the operating system, running daemons, database memory, etc.

I have a pretty inexpensive VPS that consists of 8 1.6GHz Xeons, 512MB of guaranteed RAM (up to 3GB of "burst" RAM for temporary usage), and 40GB of disk. Since I am sharing the CPUs (what with it being a VPS), the server starts to crawl once you hit a couple dozen concurrent sessions. It's CPU-bound since I have some complex CMS software running.

Getting to the point, it's the combination of bandwidth and hardware that makes running a popular site expensive. So, when you want to expand your bandwidth, you also end up having to upgrade your hardware, so the system can actually serve pages at the capacity of your pipe. This isn't cheap. Large sites tend to employ clusters of servers, separating the Web frontend from database data, using load balancers, and so forth. This is simply not affordable for someone running a hobby site.

Many sites out there are just one person or a handful of people making sites about things they enjoy. They attract visitors, and will wind up punished for their success with large bandwidth bills and server requirements. They cope with this by going with advertising, and then the users get pissed and start blocking the ads. There has to be another way, but what is it?

If you're an actual business selling products, operating the website is just part of the cost of doing business.

Yes, that's really not a big deal since you have other revenue streams--namely, selling products. You figure your website overhead into your sale prices.

It's unfortunate internet ads have become so intrusive that there is a huge demand to block them... but that's the way it is. Advertisers dish out crap and guess what, it's my computer and I get to choose what servers I download content from. If a site is hosting their own ads rather than dealing with doubleclick or some such service, there's a much higher likelihood nearly every user will see them.

It may be your computer, but by that token, it is the owner's website. If they want you to look at ads for the privilege of viewing their content, you really have no business telling them otherwise. If you don't like the ads, go to another site.

 

[Amaris]

We could figure out how to make a better solution by seeing how successful free hosts manage to make it work. My board sits on the Zetaboard server, and is hosted for free by them. I have unlimited bandwidth, unlimited user impressions. To help pay for the cost, there is an ad at the top and an ad at the bottom, both of them Google based ads that don't throw out crazy flash scripting to block the page or noise to scare the bejesus out of you.

The best part is that even though they're not as intrusive, you can pay to have those ads removed. For example, $9 will get about 25,000 ad free serves, and after 25,000 page views, the ads come back. This seems to work, as there are very large sites with thousands of members, and being ad supported by the Google ads seems to work.

 

[Robert Maxwell]

We could figure out how to make a better solution by seeing how successful free hosts manage to make it work. My board sits on the Zetaboard server, and is hosted for free by them. I have unlimited bandwidth, unlimited user impressions. To help pay for the cost, there is an ad at the top and an ad at the bottom, both of them Google based ads that don't throw out crazy flash scripting to block the page or noise to scare the bejesus out of you.

The best part is that even though they're not as intrusive, you can pay to have those ads removed. For example, $9 will get about 25,000 ad free serves, and after 25,000 page views, the ads come back. This seems to work, as there are very large sites with thousands of members, and being ad supported by the Google ads seems to work.

I imagine Zetaboards can afford to do this through an economy of scale--they no doubt have a massive infrastructure on the backend. It's cheaper, per site, to do it that way. Unfortunately, it leaves you with very little control over the eventual fate of your community!

 

[Amaris]

We could figure out how to make a better solution by seeing how successful free hosts manage to make it work. My board sits on the Zetaboard server, and is hosted for free by them. I have unlimited bandwidth, unlimited user impressions. To help pay for the cost, there is an ad at the top and an ad at the bottom, both of them Google based ads that don't throw out crazy flash scripting to block the page or noise to scare the bejesus out of you.

The best part is that even though they're not as intrusive, you can pay to have those ads removed. For example, $9 will get about 25,000 ad free serves, and after 25,000 page views, the ads come back. This seems to work, as there are very large sites with thousands of members, and being ad supported by the Google ads seems to work.

I imagine Zetaboards can afford to do this through an economy of scale--they no doubt have a massive infrastructure on the backend. It's cheaper, per site, to do it that way. Unfortunately, it leaves you with very little control over the eventual fate of your community!

That's true. If they shut down tomorrow, I don't have anything to save. They used to offer backups but stopped once the transition to Zeta from Invision was complete.

 

[Jadzia]

We could figure out how to make a better solution by seeing how successful free hosts manage to make it work. My board sits on the Zetaboard server, and is hosted for free by them. I have unlimited bandwidth, unlimited user impressions. To help pay for the cost, there is an ad at the top and an ad at the bottom, both of them Google based ads that don't throw out crazy flash scripting to block the page or noise to scare the bejesus out of you.

Sometimes, the website is the business, that seeks to make its owners a profit through the revenue it gets from ads.

Type a domain name into the search box in http://websha.com/ and it will estimate the monetary outgoings and income based on freely available data, such as page views and bandwidth and the ads the site uses.

 

[Mr. B]

It may be your computer, but by that token, it is the owner's website. If they want you to look at ads for the privilege of viewing their content, you really have no business telling them otherwise. If you don't like the ads, go to another site.

In the case of most ads, it's not on the owner's website... it's the ad server's website that has content on the "owners" webpage. On this page for example, ad content is loaded from slipserver.com.

 

[Robert Maxwell]

It may be your computer, but by that token, it is the owner's website. If they want you to look at ads for the privilege of viewing their content, you really have no business telling them otherwise. If you don't like the ads, go to another site.

In the case of most ads, it's not on the owner's website... it's the ad server's website that has content on the "owners" webpage. On this page for example, ad content is loaded from slipserver.com.

What does that have to do with anything? The owner of the site most certainly intends for you to view the ads, which is why the code for them is embedded in the page. The ad is intended to be displayed as part of the site in question. By deliberately blocking this, you are knowingly consuming the site's resources--which the owner pays for--without contributing ad views in return.

 

[Amaris]

We could figure out how to make a better solution by seeing how successful free hosts manage to make it work. My board sits on the Zetaboard server, and is hosted for free by them. I have unlimited bandwidth, unlimited user impressions. To help pay for the cost, there is an ad at the top and an ad at the bottom, both of them Google based ads that don't throw out crazy flash scripting to block the page or noise to scare the bejesus out of you.

Sometimes, the website is the business, that seeks to make its owners a profit through the revenue it gets from ads.

Type a domain name into the search box in http://websha.com/ and it will estimate the monetary outgoings and income based on freely available data, such as page views and bandwidth and the ads the site uses.

That is neat! Well, except when checking my own board, then it's just deflating.

 

[Deckerd]

Some websites are paid for in other ways of course. The revenue doesn't have to come from the internet. The ones that don't have any adverts are clearly paid for by 'invisible' means, for instance the specialist ones run by the academic community and all governmental websites.

 

[Mr. B]

The ad is intended to be displayed as part of the site in question. By deliberately blocking this, you are knowingly consuming the site's resources--which the owner pays for--without contributing ad views in return.

As a user, I don't intend to download content from any other site than the one I click on or type in the address bar.

Incidentally, how much ad revenue is based on eyeballs versus pay per click?

 

[Amaris]

The ad is intended to be displayed as part of the site in question. By deliberately blocking this, you are knowingly consuming the site's resources--which the owner pays for--without contributing ad views in return.

As a user, I don't intend to download content from any other site than the one I click on or type in the address bar.

Incidentally, how much ad revenue is based on eyeballs versus pay per click?

Impressions (eyeballs) versus click-through is like two totally different worlds. When I ran a board years ago on an ad supported (but limited impression based) board, it took about 5000 impressions to equal the ad revenue of one click-through, which is miniscule already.

 

[Robert Maxwell]

The ad is intended to be displayed as part of the site in question. By deliberately blocking this, you are knowingly consuming the site's resources--which the owner pays for--without contributing ad views in return.

As a user, I don't intend to download content from any other site than the one I click on or type in the address bar.

Incidentally, how much ad revenue is based on eyeballs versus pay per click?

If you don't "intend" to download content from any other site, then you should probably get off the Internet, because the ability to hotlink data between multiple domains is one of the key features of the Web.

CPC pays much better than CPM, however some sites (like TrekBBS) have contracts that guarantee the ad service a certain number of ad views. When people use ad blockers, they drive down the ad views, which puts the contracts in jeopardy, which can get the site kicked off the ad service. Larger sites can get by depending on CPM (view only) revenue because they have so many users. It is those sites especially that get harmed by ad-blocking.

The ad is intended to be displayed as part of the site in question. By deliberately blocking this, you are knowingly consuming the site's resources--which the owner pays for--without contributing ad views in return.

As a user, I don't intend to download content from any other site than the one I click on or type in the address bar.

Incidentally, how much ad revenue is based on eyeballs versus pay per click?

Impressions (eyeballs) versus click-through is like two totally different worlds. When I ran a board years ago on an ad supported (but limited impression based) board, it took about 5000 impressions to equal the ad revenue of one click-through, which is miniscule already.

5000 impressions is peanuts for a bigger site, though. There comes a point where your site's size makes CPM more profitable overall than CPC--the number of impressions greatly outstrips the clicks!