Advertising is a weird business model. It’s not killing the golden goose, but it’s right on that edge. The proper metaphor might be goose-based autoerotic asphyxiation. You’re trying to balance money and fun without killing the whole thing.
In order to sustain content, you need to stuff it as much as possible with distractions, but not so much that people actually leave. At the highest level there are ads which people like to watch (Superbowl ads, any of those viral ones) but the bread and butter of both content and business is basically interrupting and annoying people.
In Sri Lanka the Daily Mirror is one side of that ledge, where advertising overwhelms the content. On the other end you have Facebook and Google which actually make ads useful and appealing, sort of. At YAMU we’re really trying to find a balance. One example I like is Uncrate, but we have both higher overheads and smaller clients.
It’s a fact that content – good, human-driven content – requires money. It requires a lot, lot less than it did in the print and distribute days, but it still requires some. At YAMU we burn at least Rs. 600,000 a month, bill about Rs. 400,000 and collect probably half of that any given month. Realistically, we actually need to bill about Rs. 1 million per month to be anywhere near break even, on a cashflow basis, and we have to really double that to be profitable and grow.
Yet, the issue we have is that we can’t simply get there by selling more banner advertising. Right now we run about three ads per page and we never want to go above five. At that point advertisers aren’t getting value and readers are getting annoyed, we think. At the same time we (mainly me) have to change the culture of looking at advertising as a necessary evil but as something good that we do for clients that we care about just as much as our readers. Which means rethinking what advertising is.
So what’s the answer then? I honestly don’t know. We’re still thinking about it. Maybe I’ll start updating what I’m thinking about here. It certainly isn’t politics.