Writing on the Online Spin blog for MediaPost, Joe Marchese speaks something that we've talked a little about here before, and we need to look at it a lot more closely. It's concerning the current mentality of building online businesses that are usually built with a "If you build it, they will come" thought in mind.
You read it all over the Internet about this being the necessary way of doing it.
Marchese says concerning this "2.0 businesses and valuations continue to be built with a 'If you build it, they will come' mentality. 'It' being traffic and/or user base, and 'they' being advertisers and their checkbooks. But solving the issue of advertising in Web 2.0, or any social media, has to be more than an afterthought, because like the Web 2.0 products and services themselves, advertising solutions are going to require education, experimentation and iteration to deploy."
He adds that the point isn't to drop developing product functionality for the sole purpose of creating user value, but he questions why those who are creating advertising models are neglecting the advertising strategy along with it.
I agree. It's the "cool" thing to say that we're only going to focus on user value and figure out the monetization later. The problem is that the "later" comes "sooner" than expected. It should be considered a part of the process from the beginning. It should be thought of in the entire business plan and strategy to start with; not some insignificant add-on later.
Other than a very few companies that have been bought by those with multi-billion dollar pockets, "build it, they will come" won't work. Even Google (GOOG) will be pressured eventually by shareholders to start monetizing YouTube. If you don't think so, just wait around awhile. YouTube was bought with stock and turning it into a cash generator not only is morally required, but legally as well.
YouTube will eventually stop growing, and I think that's really what Google is waiting for. At that time they'll probably start a much stronger ad campaign with little to lose, as users migrate to much more targeted, specific sites.
The point for online marketers is that we need to build our online business to reflect the reality that we'll need to monetize it. To continue with the thought that they will come and we'll figure-it-out-later mentality sounds great and makes for exciting copy to read, but for running a profitable business, very few will be able to do this successfully.
I think for most of us we need to socialize out customers into knowing from the beginning that the service and product will be ad-supported. It takes away added surprises later for users, while growing revenue for the company.
It doesn't mean that we don't offer up the best user-experience we can muster, but just with some type of ad platform built into it.
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