Advertising is overrated!

I just read an article in The Observer which immediately brought me down to earth with a bump! Apparently well-known sites such as Twitter are not very profitable. Twitter has money at its disposal because of investment funding, but has not earned a penny. So whoever is considering setting up a new social website, should either come up with a USP or think twice.

It is common knowledge that online revenues mostly stem from online advertising. However, most people tend to forget that this only applies to sites that specialise in search, such as Google. The reason is simple: when people are searching for something, they are interested in the results, which means they will be more likely to click through to an advertiser. Conversely, most banners on social websites are ignored. Moreover, research has proven that only 8% of all internet users are responsible for about 85% of all banner clicks on the web.

So what should we do next? If we want to earn a fortune by creating a new social website, we should first try to develop a solid ROI plan.

Liesbeth Derycke